NUTRICIA, Danone SA’s advanced medical nutrition unit, has begun an internal investigation after a Chinese newspaper published a report alleging it had bribed more than 100 doctors in Beijing to boost sales.

    It was the third time in two weeks that a division of the French food group has had to respond to accusations of bribery in the Chinese media, after its infant milk formula group Dumex was twice the subject of bribery claims reported by China Central Television.

    China is a magnet for foreign milk powder makers, with a US$12.4 billion market expected to double by 2017.

    Nutricia, which makes Karicare milk formula, bribed doctors at 14 hospitals in Beijing with kickbacks, gifts, travel expenses and complimentary tickets for shows between 2010 and 2013, the 21st Century Business Herald reported Wednesday, citing an unnamed whistle-blower who claimed to be a student doctor.

    The whistle-blower had 52 documents detailing payments from Nutricia, the largest portion of which were to Beijing Aerospace General Hospital and Xuanwu Hospital Capital Medical University.

    Nutricia had paid 300,000 yuan (US$49,000) to a dozen doctors at the two hospitals over a three-year period, it said.

    “We only saw the report this morning, so we’ve only just started an internal investigation into the matter,” said Zhao Qing-hua, a spokeswoman for Nutricia in China. “At the moment we still don’t know the details. ... We need to wait to see the outcome of the investigation before we can make our next plans.”

    The two hospitals did not respond to telephone queries about the report.

    Corruption in China’s pharmaceutical industry remains widespread, fueled in part by low base salaries for doctors at the country’s 13,500 public hospitals.

    The newspaper said the documents also showed that sales representatives had made bribes through more unusual means, such as cleaning fish tanks and organizing strawberry-picking trips.

    Hospitals are an important sales and marketing channel because a recommendation from medical staff can help persuade new parents to choose a particular brand, industry insiders said.

    Milk powder firms typically spend close to 5 percent of their revenue “opening” medical sales channels, a separate recent report in the newspaper said, citing a China-based former employee at a foreign milk powder brand.

    A statement from China’s health ministry last week said it would crack down on hospital sales tactics and punish staff who accepted bribes. (SD-Agencies)