Full Text of NDRC’s Public Announcement on Milk Powder Manufactures’ Vertical Monopoly of Price Control

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(By You Yunting) According to the latest announcement on Chinese National Development and Reform Commission website, NDRC’s carried out anti-monopoly investigations into milk powder manufacturers and imposed fines. Based on this announcement, we found that there are different views between NDRC and Chinese courts on the understanding of Article 14 of the Anti Monopoly Law. With regard to the court’s understanding that milk powder formula in this case is effective competitive, the milk powder manufacturers shall not the determined as violating the the Anti Monopoly Law even if they conducted price control. Following is our translation for this public announcement.

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Why the Anti-Monopoly Law Can’t Cut Price of Infant Milk Formula in China?

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(By You Yunting) According to media reports, China’s National Development and Reform Commission (“NDRC”)’s anti-monopoly investigation into infant milk formula discovered that nine milk powder manufacturers, including Wyeth, announced one after another in early July that they would lower their prices, with an average discount of 11%. At the same time, Wyeth canceled its earlier decision to raise the price of Wyeth S-26 Progress GOLD product, a new product by 4 percent. Some consumers told reporters that salesclerks would first recommend Wyeth S-26 Progress GOLD product, and would only bring out the discounted, original milk formula when asked by the consumer with regards to the discount. The following points should be look at more carefully:

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