Fonterra contacted by Chinese regulator over milk probe

Fonterra Cooperative Group, the world’s biggest dairy exporter, has been contacted by the China National Development and Reform Commission as part of an investigation into milk powder prices in the world’s most populous nation.

The Auckland-based company is cooperating fully with the Chinese regulator, which is reviewing a wide range of consumer businesses in the Chinese dairy industry, Fonterra said in a statement.

Earlier this week, Chinese publication the People’s Daily reported the NDRC was looking at major foreign companies selling milk powder into China over price manipulation.

Fonterra has been boosting its exposure to Asian markets and China in particular as it looks to cash in on an increasingly wealthy population with growing demand for protein.

The company has been building farm hubs in China with a view to producing one billion litres of milk by 2020.

Units in the Fonterra Shareholders’ Fund rose 0.7 percent to $7.35 today.