Fonterra is conducting an internal review but denies any wrongdoing after Chinese police arrested 19 people in Shanghai for selling around 300 tonnes of the company’s expired milk powder…Full Article: NZ Herald Oct 2016

Key Point

  • Approximately 200 MTs of the expired Fonterra milk powder was repackaged and resold (via wholesale markets and e-commerce sites) in Shanghai, and in the provinces of Jiangsu, Henan, and Qinghai.

ChinaAg Comments

  • In July 2016, Fonterra’s Chinese business partner, Hangzhou’s Beingmate, announced profit losses relating to the April 2016 milk powder scandal. Beingmate had projected a NZ$21 million profit, but revised this figure to a NZ$44.5 million to NZ$48 million loss in the wake of a counterfeit infant formula scandal.
  • In April 2016, a Beingmate Baby & Child Food authorized dealer was found selling fake/counterfeit Beingmate (China), Abbott Laboratories (USA), and Vitacare (New Zealand) infant formula products. The arrested dealer was authorized to sell products from Beingmate Baby & Child Food Co. Ltd., which is based near Shanghai in Hangzhou. From August 2014 to May 2015, the Beingmate-authorized dealer repackaged high-priced branded products with lower-priced product, and then sold the counterfeit products to retailers in Zhengzhou (Henan Province) and Hefei (Anhui Province).
  • In August 2014, Fonterra announced plans to purchase a 20% stake (US$467 million) in Beingmate (based in Hangzhou, Zhejiang Province). Beingmate in return would hold a 51% stake in Fonterra’s Gippslands milk powder factory in Victoria, Australia (near Melbourne).

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