Infant formula comes under the microscope in China
In a recent post on our sister blog, China Law Insight, Susan Ning, Kate Peng, Huang Jing and Li Rui discuss the investigation initiated by the National Development and Reform Commission (NDRC) against several infant formula companies for the alleged violation of Article 14 of the Antimonopoly Law (AML).
This is the second investigation by the NDRC against resale price maintenance (RPM). Earlier this year, as blogged about here, the NDRC investigated and fined China’s producers of premium liquor, Kweichow Moutai Co Ltd. and Wuliangye Group Co., Ltd. for RPM conduct.
Multiple infant formula companies are currently being investigated and media reports suggest that it was the high consumer price for infant formula that triggered the current NDRC investigation.
While, the outcomes of the investigation are uncertain, there is widespread speculation that the NDRC will impose large fines on the companies being investigated. However, the AML does allow flexibility for how the regulator may approach this type of matter.
To read more about the various mechanisms outlined in the AML for purposes of assessing monopoly agreements in the investigation, see the article here.