Diary giant Fonterra of New Zealand has gotten itself into another mess in China. This time, it's been ordered to pay US$793,000 for overpricing its baby milk formula products in the world's second-largest economy.

Apart from Fonterra, there were also other dairy companies slapped with penalties for violating China's anti-monopoly laws, including Hong Kong's Biostime International Holdings Ltd, Mead Johnson Nutrition Co, Royal FrieslandCampina NV and Abbott Laboratories.

"We believe the investigation leaves us with a much clearer understanding of expectations around implementing pricing policies," Kelvin Wickham, president of Fonterra Greater China and India, said in a statement.

The company, however, said it does not exactly know how it had violated the country's law on pricing.

Mead Johnson, maker of Enfamil formula, was fined with US$33 million, while Biostime International Holdings Ltd. was penalised for US$26.3 million.

"The Chinese regulators are getting aggressive on pricing, market dominance, mergers and acquisitions, all at the same time," James McGregor, chairman of APCO China, was quoted by Bloomberg. "This is a very significant fine that will catch everybody's attention."

Foreign infant formula is highly coveted in China. However, public trust was seriously broken when a scandal involving milk tainted with the toxic industrial compound melamine led to the deaths of six infants in 2008. Because of this, the Chinese referred and preferred buying and drinking foreign brands, which now account for about half of total sales of infant formula. It is also set to grow to US$25 billion by 2017.

On Tuesday, Biostime suspended its shares, pending the release of an announcement related to the investigation. Trading will resume on Wednesday.

Mead Johnson said the fine will slash its full-year earnings by 12 cents per share.

Apart from the overpricing, New Zealand diary giant Fonterra is involved in a separate milk powder contamination scare in China, Hong Kong and elsewhere in Asia. It has conducted relative product recalls in the mentioned regions.