Tuesday, September 16, 2008

Chinese toxic milk scandal spreads

China’s tainted milk powder scandal escalated dramatically on Tuesday as 22 Chinese dairy companies were found to have produced infant ­formula containing a chemical blamed for killing two infants, state television reported.

The Chinese government, eager to contain the damage to its image for product safety caused by the scandal, has launched an investigation that involves testing baby milk powder throughout the country. The state-run television report said sales of the suspect products had been halted.

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“In order to ensure the safety of the milk products, the relevant government departments have pulled them from shelves, sealed them, recalled them and destroyed them,” CCTV said in its broadcast. The report said China’s leading product-quality watchdog would ­dispatch inspectors to all milk-product manufacturers nationwide.

The list of companies caught up by the tainted milk scandal includes Yili, one of China’s largest dairy groups and a sponsor of the Beijing Olympics, and Mengniu, another leading dairy producer.

Previously, reports of tainted milk had focused on Sanlu, the Chinese dairy company that is 43 per cent owned by Fonterra dairy co-operative of New Zealand. The news that many other companies are involved could escalate the crisis at home, where it has led to panic and outrage among parents, and abroad where China’s image could be further damaged.

China has been criticised for trying to cover up the scandal. Helen Clark, New Zealand’s prime minister, has said local Chinese officials knew for weeks about the chemical-contaminated milk but did not act until the New Zealand government intervened with Beijing.

The infant formula scare is the latest in a series of product safety scandals in China, involving everything from lead in toys to contaminants in pet food, that have damaged China’s image as an exporter.

So far there is no evidence that tainted milk products have been exported outside China. Chinese infant formula cannot be imported to the US but the US Food and Drug Administration has said it was investigating whether Chinese milk powder is available in ethnic markets serving Asians in the US.

The adulterated formula is thought to contain the chemical melamine – which is normally used in plastics, fertilisers and cleaning products – and has been linked to thousands of pet deaths in the US blamed on Chinese pet food exports.

The Xinhua news agency said on Tuesday night that the board chairwoman and general manager of the Sanlu group had been dismissed from her posts as part of the broadening scandal. Four people have been arrested in connection with the melamine contamination allegations. Adding melamine to milk is a tactic to mask its dilution with water. To add melamine might increase the apparent protein content of diluted milk.

Chinese dairy stocks listed in Shanghai fell sharply in early trading but recovered some losses later, before state television linked chemical contamination to dairy companies beyond Sanlu.

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