GlaxoSmithKline's China sales slump in wake of scandal
Britain's biggest pharmaceuticals company, GlaxoSmithKline, saw its drug sales in China crash by 61 per cent in the three months after its massive bribery scandal in the country.
The plunge, which was far worse than the City had expected, was described by Deutsche Bank analysts as "dire".
The GSK chief executive Sir Andrew Witty blamed "the media in China and the commentary in China" for "creating an anxiety which has led to some disruption in the business".
Chinese officials claimed in July that GSK funnelled up to 3bn yuan (£303m) to facilitate bribes to doctors and officials. Before the scandal, GSK's China sales had been up 14 per cent.
But Sir Andrew said GSK had no plans to quit China, where it has 7,000 staff.
"Even with this decline in sales, [China] is still a multi-hundreds-of-millions-pound business," he said. "We're the most integrated pharma company in China, starting from molecule discovery in Shanghai going through every step of the value chain through to sales and distribution. It's a very important business for GSK, China is a crucially important country and... we are working with Chinese authorities to engage in rebuilding trust with the people of China."
The pharmaceuticals boss added it was "too early" to take a charge anticipating a fine for the bribery allegations, and warned other foreign drug makers would be hit too. "We're not the only company to have seen a slowdown of sales in China," he said.
But the City was unimpressed: Jeffrey Holford, an analyst at Jefferies, said: "China looks worse than expected."
Overall, GSK's sales were flat at £6.51bn in the third quarter, while operating profit rose 11 per cent to £2.1bn.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...