Emerging news reports say that Chinese authorities have begun an investigation into price fixing deals by manufacturers of imported baby formula.

The National Development and Reform Commission (NDRC) has unveiled a scrutiny after allegations of a monopoly in the industry.

With its large population, China is the world's biggest consumer of baby formula, revealed studies by Euromonitor, a consumer research agency.

Most of the firms involved in the allegations are overseas manufacturers with Biostime, a Chinese company being the sole domestic company mentioned in the allegations, reported the People's Daily.

The concerns over price-fixing come on the heels of a tainted formula food safety scandal that has created a strong demand for imported formula products that are more expensive than domestic ones.

Foreign formula under examination include Dumex made by French yoghurt maker, Danone, Wyeth, Mead Johnson, Friso and Abbott. The list also includes Nestle, the popular chocolate firm headquartered in Switzerland.

A Nestly China spokesperson told Agence France Presse, "The company has been actively cooperating with the investigation."

After a serious food safety threat involving baby formulas tainted with melamine, killing 6 children and harming 30,000 in 2008, foreign baby formula prices went up as much as 30 per cent.

China has been under fire for widespread corruption and lack of oversight in the food and toy industries after a number of incidents causing harm to consumers.

A few years ago, U.S. toy firm Mattel had to recall its products due to lead containing paint on its toys. Lead is presumably a harmful agent that causes damage to the brain.

In similar cases, seafood and poultry imported from China was send back to the mainland from U.S. check points after it was found to be tainted with Salmonella. These incidents have taken away the credibility of Chinese products, which were considered to be inexpensive in comparison to products made in the U.S. and Europe.