French food maker Danone SA said it would appoint new management at its Dumex infant milk powder operation in China and has suspended a nutrition program for mothers in the wake of a bribery scandal at Chinese hospitals.
Dumex China expressed “deep regret” for what it called shortcomings over a program that was intended to raise standards in pediatric care and included advice on nutrition.
The company launched an investigation after China Central Television (CCTV) reported last month that Dumex had bribed doctors and nurses across hospitals in northern China to recommend its infant formula to mothers.
Authorities in the northern city of Tianjin had punished 13 medical workers for taking bribes to recommend the infant formula, the local government said on Monday.
China is a magnet for foreign milk powder makers, with the country’s US$12.4 billion market expected to double by 2017.
However, foreign firms are under intense scrutiny after a spate of media reports alleging corrupt sales practices in the industry. Authorities in August also fined a group of mostly foreign milk powder producers, including Danone, a total of US$110 million for price fixing.
Danone reports third-quarter sales today, giving the firm an opportunity to brief investors on its problems in China.
“Disciplinary actions will be taken according to the relevant company regulations including appointing new management personnel to deal with relevant issues,” Dumex China said in a statement.
Dumex said its policies included support for maternal breast feeding, as well as compliance with all local and national regulations in China.
However, it said some practices had contradicted the purpose of the nutrition program. It did not elaborate.
Additional mandatory training to ensure compliance with the company’s marketing policies would be given to all employees, the statement said. Dumex added it would make no further comment.
The statement did not refer to separate accusations published in a Chinese newspaper last month that Danone’s advanced medical nutrition unit Nutricia had bribed more than 100 doctors in Beijing to boost sales.
Danone has said it was investigating that report.
The CCTV report on Dumex led to Tianjin’s government and police launching an investigation into the bribery accusations.
The “serious violators” received penalties ranging from cancelation of medical licenses to salary deductions, Tianjin’s government said in a statement on its Web site. Several of them had to go through disciplinary procedures by the Chinese Communist Party.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure