| Abstract: |
Chaotic sales channels have been blamed for China's latest fake infant formula scandal where 22,600 cans of counterfeit milk powder were sold under the brands of Chinese infant formula maker Beingmate and US-based Abbott Laboratories. Fonterra Cooperative Group [NZX: FSF] has a close association with both – it invested in an 18.8% stake in Beingmate last year and is jointly developing a new dairy farm hub in China with Abbott. Nine people were arrested over the weekend and charged with making and selling fake products in seven provinces and Chinese media report they were all long-time formula distributors who were familiar with production processes. Wang Dingmian, former director of the Dairy Association of China, was quoted as saying chaotic sales channels in China's dairy industry were responsible for the problem whereas in countries like Australia supermarkets usually buy products directly from manufacturers with no traders involved. |
