French Baby Milk Danone, Dumex in Hot Seat, Accused of Bribery in China

Dumex, an infants' and children's nutrition company that is a subsidiary of French food-products multinational corporation Groupe Danone, is currently in the hot seat in China. State television China Central Television on Monday reported that the company allegedly bribed hospital personnel so that its milk powder will be given preference to newborn babies.

CCTV said Dumex handed out cash to doctors and nurses of the Tianjin Central Hospital of Obstetrics and Gynecology in the northeastern city of Tianjian.

Claiming its source was a former Dumex sales manager, the CCTV report showed a list of of names of medical workers in a number of hospitals in Tianjin who have allegedly received monthly payments between January and July, ranging from several hundred yuan to 10,000 yuan ($1,633).

Giving milk powder or formula to newborns is only allowed to Chinese mothers who cannot breastfeed due to medical reasons or those who do not have enough breast milk.

In a statement, Dumex said it was "extremely shocked" at the allegations and would immediately investigate the matter.

"Dumex China pays great attention to the CCTV report on the promotion of products in hospitals in Tianjin. We will launch an investigation into this matter immediately."

"The company strictly adheres to Chinese laws and regulations, including Administrative Measures for Marketing of Breast-milk Substitutes. We have set up a strict management system, including severe punitive measures against all violations," the statement said.

This is not the first time that Dumex figured in a nasty incident in China. In August, it was ordered to pay US$28.1 million because of price-fixing in August. The Tianjin health bureau likewise said it will launch an investigation on the medical staff who accepted the bribes.

"The bureau has asked local hospitals to investigate," an unidentified official from the health bureau told China Daily on Tuesday.

"We will apply serious punishment to those medical staff and hospitals found taking commercial bribes."