Dumex China Denies Allegations of Inciting Corruption

China Central Television (CCTV), a state-owned major network in the Asian country, on Monday accused the maker of infant milk Dumex, a subsidiary of the French giant Danone

, of systematically corrupting the medical staff of a hospital in Tianjin, northern China. According to CCTV, cited by

in Shanghai, the company poured loads of yuan to care-nurses and doctors of the maternity hospital, in order to encourage the consumption of the company's formula to newborns, before they receive mother's milk. The company was seeking to assure that the child receives the product on the day of birth, as this may create a risk of “addiction” to newborns, which can lead to subsequently “reject any breastfeeding," noted the Chinese news channel. In exchange for this extra money, doctors indeed authorized the use of the brand's infant formula in the facility, while midwives actively recommended its use on young mothers, said the report. In the report, CCTV quoted the testimony of a former sales manager with Dumex who requested anonymity. “Every year we were in contact with the hospital staff and we give money, hundreds of thousands of yuan,” said the former employee of the group. CCTV said that the former employee showed authorities a document revealing that the hospital-staff received each month nearly 300,000 yuan (about $49,000) and the individual payments ranged from several hundred to 10,000 yuan. However, as reports the Japanese Sekai Nippo, citing Reuters, the sales manager added in his testimony that “the competition is so intense in Tianjin that if we do not hold a tacit agreement our brand would be excluded next month." This statement depicts differently the circumstances on which foreign companies may have to operate in China and casts blame to the Chinese. On the other hand, Dumex rejects any wrongdoing. “Dumex China pays great attention and is deeply shocked by the report of CCTV on the promotion of Dumex products in Tianjin hospitals,” underlined the company issuing a statement. “We will launch an investigation into this matter,” promised Dumex in the statement, sent to all major international news agencies. However, in a separate report released on Monday by CCTV, and filmed with a hidden camera, journalists posing as representatives of a milk-producing firm are showed talking with a doctor at the hospital in Tianjin. He tells them that in order to promote a brand of infant milk within the hospital, it is necessary to receive something in return. For example, the company could support “study sessions” for doctors where they can be paid as speakers, while the nurses should receive bonuses. These charges come only weeks after Chinese authorities have launched a round of investigations against multinational companies, and their practices of conducting business in the country.

is within the scope of such vast corruption investigation in which twenty people have been arrested since the beginning of July. A separate investigation is also under way to check the prices of sixty pharmaceutical companies operating in the country. Dumex, in early August had been one of six manufacturers of infant milk powder sentenced to heavy fines by the Chinese authorities for price-fixing and was fined a fine of 172 million yuan (approximately $27 million). However, Dumex says that the company "strictly applies the laws and regulations of China.” “We have implemented a strict system in business management, including severe measures against all illegal actions,” claims Dumex.