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Dumex to appoint new management amid bribery scandal

The infant formula maker halts nutrition awareness programme.

Dumex, the Chinese baby nutrition unit of French food maker Danone, will appoint new management following allegations of bribery at the country’s hospitals.

The company has also suspended a health-education programme to create awareness for Chinese mothers.

Last month, China Central Television (CCTV) reported that Dumex had offered bribes to doctors and medical staff in the northern part of the country to promote its products aimed for mothers and infants.

The official probe found that 116 employees in 85 hospitals have violated rules by accepting bribes since 2011.

Tianjin city police has filed cases against 13 medical staff took for taking bribes to recommend the company’s infant formula.

In August, the Chinese authorities have imposed a penalty on several foreign milk powder makers including Danone of $110m for rate fixing. In addition, Danone is also investigating bribery issues published in a Chinese newspaper in September.

Dumex China was quoted by Reuters as saying: “Disciplinary actions will be taken according to the relevant company regulations including appointing new management personnel to deal with relevant issues.”

The company intends to implement a 90-day training programme to its staff on selling its products ensuring government norms.

Warren Ackerman, an analyst at Societe Generale in London told Bloomberg: “The bribery report “certainly doesn’t help the brand equity of Dumex. Consumers seem to be sensitive to things like this.”

As per the World Health Organization norms, doctors should recommend new mothers infant formula products only in the absence of breastfeeding.