Danone hit by allegations of bribery in China

The View from China: Danone has become the latest international food giant to be hit by allegations of wrongdoing in China, after a report on state television claimed that its Dumex baby food brand had bribed doctors and nurses in the country.

The allegations are the latest to hit Danone, which last month was accused by Chinese Government of engaging in anti-competitive pricing practices over its infant formula products.

The report, by China Central Television, cited an unidentified former Dumex sales manager as saying the company had bribed staff at a hospital in Tianjin to recommend its products to new parents.

The anonymous source claimed that Dumex pays hundreds of thousands of renminbi each year to staff in hospitals across Tianjin, with each doctor or nurse receiving anywhere between a few hundred yuan to 10,000 yuan per month, totalling 300,000 yuan (€37,000) per month. The manager also claimed to possess a document detailing payments to doctors, with their bank card details and amounts paid.

Danone reacted quickly to the report, saying it was “extremely shocked” and would “immediately launch an investigation”. The group is keen to avoid any controversies in China, which is its largest market in the Asia-Pacific region, which accounts for 40 per cent of Dumex sales (the unit accounts for more than 20 per cent of global group sales).