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Press release from PR Newswire

CER Research Responds to Abbott Laboratories on China Infant Formula Report

Friday, March 23, 2012

CER Research Responds to Abbott Laboratories on China Infant Formula Report06:22 EDT Friday, March 23, 2012HONG KONG, March 23, 2012 /PRNewswire-Asia/ -- CER Research, a Hong Kong-based corporate research and investigative company, Friday issued a statement responding to allegations from Abbott Laboratories (NYSE:ABT) with regard to a report released by CER Research on March 22 reporting on an Abbott infant formula product that tested with sub-standard results.The report gave details of five tests conducted on the Abbott product, bought in Hong Kong in December and tested by one of the world's top food testing laboratories in Germany, with comments from named top experts. The product, Similac Stage 1, failed two of the tests by a significant margin. A copy of the full report can be found at www.cerresearch.com.Abbott on Friday issued a statement in Chinese, but interestingly not in English, critcizing the report for lacking "scientific-ness, objectivity and fairness".CER Research is not a scientific research organization and has no independent view on milk powder. The test results and the comments on those results come from named and recognized laboratories and experts.As to fairness, we tried to speak to Abbott about the results but were rebuffed, as detailed in the report itself.The Abbott statement said the product, bought in Hong Kong, was not meant for sale in the China mainland market and therefore did not need to meet the Chinese national standard with regard to product safety.The CDR Research report states that according to the laboratory results and the expert comments, the Abbott product sample in certain key areas failed both international as well as Chinese national standards.Most surprisingly, the Abbott statement issued within hours of the release of the CER Research report says categorically that "there is absolutely no basis" for the charges.CER Research's view is that such a response is in itself somewhat irresponsible. Anything is possible, and a more responsible response, we believe, would have been along the lines of "We find this extremely hard to believe but we will look into it immediately." Instead, without taking action or looking into the situation any further, they flatly state: "Our product is safe."This stonewalling approach was reflected in their response to our effort to contact a manager in Abbott Hong Kong to discuss the results ahead of the release of the report: The receptionist refused on the basis of "company policy" to put us through to any manager. In our view, a company selling consumer products such as infant formula should be eager to at least scan any contact from consumers or the market with regard to any quality concerns. But their company policy is to refuse such calls.The Abbott statement refers to the fact that the CER Research report states that it had sent six product samples for tests, but only gave the data for the Abbott product.Work on this project, and other projects, continues. But quality standards are not relative. If a product fails to meet certain standards, the company needs to take responsibility for it, regardless of how the product stacks up against other products. We are surprised at Abbott's efforts to deflect attention from the core issue of product quality with this red herring. To avoid any misunderstands, however, we can say that none of the Chinese brands included in the study are major brands.The Abbott statement says the report does not make clear on whose behalf the report was done. The answer is that it was initiated by CER Research and was not commissioned by any other party.The Abbott statement says that the CER Research report does not make it clear what scientific methods were used to produce the results. We disagree. There is a large amount of information on this included in the report.Contact details:Graham Earnshawgraham.earnshaw@cerresearch.com+852 3174 6136+86 139 016 68748orZac AghionZac.aghion@cerresearch.com+852 3174 6136SOURCE CER Research