Fonterra fined $900K by Chinese authorities

It’s been a bad month for Fonterra. As if the Clostridium botulinum contamination scare wasn’t enough, the company has now been slapped with a NZ$900,000 administrative fine following the conclusion of the China National Development and Reform Commission (NDRC) review of pricing practices of consumer dairy products in mainland China.

“Fonterra has been cooperating fully and openly with the NDRC throughout this process,” said Kelvin Wickham, President of Fonterra Greater China and India. “We accept the NDRC’s findings and we believe the investigation leaves us with a clearer understanding of expectations around implementing pricing policies, which is useful as we progress our future business plans.”

According to Wickham, a number of dairy industry companies were fined, and Fonterra’s fine was in the lowest range of fines issued.

In response to the investigation, Fonterra will provide additional training to its sales teams and will review distributor contacts to ensure clarity about how pricing policies are implemented through the distribution chain.

“We are committed to providing high-quality, premium imported products to Chinese consumers and we are also committed to being an integral part of, and long-term partner to, the Chinese dairy industry. Therefore, we are taking these steps to ensure we fully comply with the NDRC’s expectations of us,” Wickham said.