Several infant milk formula producers, mainly foreign, are under anti-trust investigation by the National Development and Reform Commission (NDRC) for allegedly fixing prices.

Baby formula companies under investigation include Nestle SA, Abbott Laboratories, Mead Johnson Nutrition Co., Danone's Dumex and Wyeth Nutrition, as well as a local company Biostime International Holdings Ltd.

The NDRC has evidence that these companies charged higher prices in the Chinese market, with price increases of about 30 percent since 2008, said a report from People's Daily.

Concerns about the safety of domestic milk powder, especially after a melamine-tainted milk powder scandal in 2008, have fueled Chinese demand for foreign infant formula. Media reports say that foreign brands now account for about half the sales of baby formula in China.

"Boosted by increasing market demand, foreign baby formula companies have raised their prices every year," said Wang Dingmian, executive council member of the Dairy Association of China. "Now, the consensus is that China is home to the most expensive infant milk in the world."