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.
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
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
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in