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A SECOND foreign manufacturer of baby formula is planning price cuts amid an investigation by China's top economic planner.

Dumex, part of France's Danone group, said yesterday it was preparing a price reduction proposal.

On Wednesday, Wyeth Nutrition, an American company bought by Switzerland's Nestle last year, said it would be cutting the price of key products by an average of 11 percent, and some by up to 20 percent.

It was "actively cooperating with the anti-monopoly investigation" and promised not to raise prices on new formula products for a year.

Dumex said its detailed price cuts proposal would be disclosed at a later date.

Other foreign companies being investigated for possible price-fixing and anti-competitive practices by the National Development and Reform Commission include US companies Abbott Laboratories and Mead Johnson Nutrition.

Abbott said it was cooperating with the NDRC, without providing further details.

Mead Johnson said earlier it was "fully cooperating" with the inquiry.

The anti-monopoly division of the NDRC had "taken notice" of the price cut proposals by foreign formula makers, China Central Television reported.

Wan Leilei, a Shanghai woman who buys formula from Abbott Laboratories for her six-month-old son, said she was undeterred by the higher price of foreign brands. "I, as well as most other Chinese, will spare no money when it comes to kids," she said.

"As long as I trust the brand ... price changes, either up or down, do not affect my buying decisions that much."

The investigation comes as China bids to revitalize and consolidate its milk formula industry after a series of food safety crises, in particular the melamine-tainted milk scandal of 2008, damaged the industry's reputation and dented consumer confidence in domestic products.

Buyers looking to supply Chinese consumers caused shortages of formula at retailers in several European countries and Australia earlier this year.

In a possible sign the investigation could stretch beyond baby formula, New Zealand's Fonterra said it had been contacted by the NDRC regarding a wide-ranging investigation into consumer dairy products, The Associated Press reported.

Fonterra is building dairy farms in China with the aim of producing a billion liters of milk here by 2020.

The Chinese government is under pressure to ensure quality products at reasonable prices following repeated food safety scandals, an analyst said.

"There is a bit of a tendency to direct extra attention at foreign firms," said Ben Cavender of Shanghai-based consultancy China Market Research Group.

"Any situation where it's being construed that companies might be selling premium products and artificially keeping prices up, there's going to be a backlash," he added.

Wang Xiaoye, a professor at the Law School of Chinese Academy of Social Sciences, told China Radio International price cuts could reduce the amount of fines foreign companies might have to pay for anti-monopoly violations.

Jian Aihua, a food industry analyst with market research company CIConsulting, said the effect of the investigation would depend on any punishments handed out by the NDRC. Whether this would benefit domestic dairy firms and restore the faith of consumers in domestic product remained unclear, Jian said.