UPDATE 1-Mead Johnson cutting China infant milk prices amid probe
July 10 (Reuters) - Mead Johnson Nutrition Co said on Wednesday it will cut the price of its infant milk formula in China, becoming the latest company to take action in the wake of an investigation by Beijing into possible price-fixing and anti-competitive behavior.
Mead Johnson, the maker of the Enfamil brand of baby formula, said it will reduce prices by 7 percent to 15 percent as of July 16. It will also launch new promotional campaigns aimed at reinforcing the trust and support of Chinese consumers.
In recent weeks, companies including Mead Johnson, Danone , Nestle, Abbott Laboratories and Hong Kong-listed Biostime International said they were being investigated by China's National Development and Reform Commission.
Danone has since said it cut prices by up to 20 percent, while Nestle cut prices by an average of 11 percent and pledged to freeze prices on new products over the next year. Biostime said it would offer consumer rewards that would result in an effective discount of roughly 11 percent.
Mead Johnson, based in Glenview, Illinois, said it is looking at its global operations for ways to offset the impact of the price cuts on its earnings. It will update its outlook for 2013 when it reports quarterly results on July 25.
Mead Johnson shares rose 4 percent to $73.12 on the New York Stock Exchange, regaining some ground after falling 13 percent in the days following news of the probe.
- Exclusive: Angry with Washington, 1 in 4 Americans open to secession
- Scots spurn independence in historic vote, devolution battle begins |
- Alibaba surges 38 percent on massive demand in market debut |
- Eight bodies found after attack on Guinea Ebola education team
- French jets strike in Iraq, expanding U.S.-led campaign against Islamic State |