Fonterra accepts China's fine

INTRO

New Zealand's dairy giant Fonterra, at the center of a contaminated milk scandal, is facing more trouble.

It has been fined about 729,000 U.S. dollars by Chinese authorities for fixing the price of its consumer dairy products.

The company says it accepts the fine and will cooperate with the Chinese authorities' investigation.

PKG

Fonterra revealed on Wednesday that the fine came from China's National Development and Reform Commission, the country's top economic planner, after a review of pricing practices in the Chinese mainland.

It is among the six baby formula companies who were fined a total of 108 million dollars for setting minimum resale prices for distributors.

Kelvin Wickham, president of Fonterra Greater China and India, said in a statement:

"Fonterra has been co-operating fully and openly with the NDRC throughout this process. We accept the NDRC's findings, and we believe the investigation leaves us with a much clearer understanding of expectations around implementing pricing policies, which is useful as we progress our future business plans."

He says the company will provide additional training to its sales teams, and review distributor contracts, to ensure clarity around how pricing policies are implemented through the distribution chain.

New Zealand's Economic Development Minister on Wednesday warned that the country's ministers are losing confidence in Fonterra.

The minister said which products were contaminated and which were being recalled was still not clear.