Anti-monopoly penalties for milk powder are coming soon

The National Development and Reform Commission’s anti-monopoly investigation of penalties for milk powder is expected to be released recently.

Beinmei (002570.SZ) announced on the evening of the announcement that on August 6, the company received the “Exemption from the Administrative Penalty Decision” from the National Development and Reform Commission (No. 1 of the “Chairman's Commission for Exemption from Administrative Expenses”) (hereinafter referred to as the “Decision”). The decision mentioned that, as investigated by the National Development and Reform Commission, Bein America has the following illegal facts: The price of downstream milk powder for resale to a third party is fixed through contractual agreements, price control, deduction of deposit, and stop of supply.

Beinmei said that the "Decision" pointed out that the above-mentioned behavior of the company violated the provisions of Article 14(1) of the "PR China Anti-Monopoly Law," and reached an agreement with the counterparty and implemented a fixed resale price for the third party. The monopoly agreement constitutes a price monopoly. In view of the company's initiative to report to the National Development and Reform Commission on the circumstances surrounding the conclusion of a monopoly agreement and to provide important evidence, the NDRC decided on the company in accordance with the provisions of Article 26(2) of the “PRC Anti-Monopoly Law.” Exemption from administrative penalties, the company should immediately stop the implementation of the monopoly agreement reached.

Coincidentally, Hopson (01112.HK) announced a temporary suspension of trading at 10:14 yesterday. Biostime said that the suspension was for the disclosure of relevant information to the NDRC.

A milk powder company insider told the "First Financial (microblogging) Daily" that the NDRC penalties for anti-monopoly will soon be released, today (7th) Development and Reform Commission may hold a press conference on this. In July this year, a number of milk powder companies such as Mead Johnson and Synbiotics announced that they were receiving anti-monopoly investigations by the National Development and Reform Commission. Since then, a number of milk powder companies have announced that they will lower their ex-factory prices.