#Fonterra accepts China price review

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The Fonterra Shareholders’ Fund is holding its ground despite another blow to the dairy company’s already shaky public image this afternoon.
Chinese authorities have fined the co-operative about $900,000 after a review of its pricing practices there.
Units in the fund have risen 1.1 per cent to $7.03 so far today, only 8c from the price they traded at before fears of a bacteria contamination were made public at the weekend.
Fonterra co-operated with China’s National Development and Reform Commission (NDRC) review of its pricing, which is unrelated to the current food safety scare.
The commission is an economic management agency with wide administrative and planning control over the Chinese economy.
«We accept the NDRC’s findings and we believe the investigation leaves us with a much clearer understanding of expectations around implementing pricing policies, which is useful as we progress our future business plans,» Fonterra Greater China and India president Kelvin Wickham said today.
«We understand that a number of companies in the dairy industry were fined, with Fonterra’s fine being in the lowest range.»
The company said it would give its sales team additional training and review distributor contracts to make sure it met NDRC standards.
Fonterra does not directly sell infant formula in China, instead distributing milk product through its Anmum brand.
Wickham said last month that prices for Anmum maternal health products in China would be cut 9 per cent, given industry-wide price revisions.
The change for Anmum Materna was effective from August 1 and included formulated milk for women during pregnancy and while breastfeeding.
It was reported that high prices charged by companies such as Nestle, Danone and Mead Johnson Nutrition were being reviewed.
Smaller exporters, such as the South Island’s Westland Milk Products and NZX-listed Synlait Milk, were understood to be not targeted by the review.
Source: Stuff

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