BBC News, 15
October 2013
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Stories
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China has been hit by a series of milk-related scandals over the past years |
Last month,
a report carried by China Central Television alleged the firm paid doctors to
promote its products.
Dumex said
the claims were related to its sponsored programme on nutritional awareness in
China.
The company
said it accepted "full accountability" for lapses in it and had
suspended the programme.
"Disciplinary
actions will be taken according to the relevant company regulations including
appointing new management personnel to deal with relevant issues," Dumex
China was quoted as saying by the Reuters news agency.
The firm
added that it would implement a three-month training program in marketing
responsibility for all employees to ensure compliance with company policies and
government regulations.
The CCTV
report, which cited an unidentified former sales manager, alleged that Dumex
paid doctors and nurse in the northern city of Tianjin.
The company
said at the time that it was "extremely shocked" by the allegations
and announced an internal probe into the matter.
Growing
demand
Demand for
foreign brands has surged in China, after tainted milk scandals in recent years
led to a distrust of local producers.
According
to some estimates, foreign brands now account for about half of all infant milk
sales in China.
Danone is
one of the firms that has benefited from the rising demand. It is the country's
third-largest baby formula provider.
Danone's
baby nutrition unit also makes more than 20% of its overall sales from China.
However, it
has faced problems in the country this year.
Danone cut
prices for its infant milk formula products by as much as 20% after China's top
economic planning body fined it in August for price-fixing.
The firm
also had to issue a precautionary recall of its milk formula products last
month after one of its suppliers, Fonterra, said some items may have been
contaminated.
Targeting
corruption
The
allegations against Danone have surfaced amid a government-led crackdown on
corruption in its $350bn (£220bn) healthcare market.
Some
inquiries have targeted foreign firms, including British pharmaceutical giant
GlaxoSmithKline, which is being investigated for allegedly using inducements to
promote the sale of its medicines.
In the CCTV
report, Danone's Dumex brand was accused of giving "sponsorship fees"
or payments of up to 10,000 yuan ($1,632) to hospital staff.
A separate
report carried by Chinese newspaper 21st Century Business Herald last month,
made similar allegations against another Danone unit.
It alleged
that Nutricia, maker of Karicare milk formula, bribed doctors to boost sales.
The report,
which also cited an unidentified person, claimed that the unit gave gifts and
travel subsidies to more than 100 doctors in 14 hospitals in Beijing.
The
statement issued by Dumex, did not refer to those allegations.
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