China dairy sued over infant's toxic milk death

[October 13, 2008]  BEIJING (AP) -- The family of a baby whose death has been blamed on toxic milk filed suit against one of China's largest dairies Monday, while another dairy ensnared in the scandal said it was a victim of unscrupulous subcontractors.

The lawsuit against Shijiazhuang Sanlu Group Co. was filed over the May 1 death of 6-month-old Yi Kaixuan in the northwestern city of Lanzhou, the family's lawyer said.

It is the first to be filed over a child who died from drinking the tainted milk and asks for almost $160,000 in damages.

Milk collection stations and individual farmers are accused of watering down milk to increase volume, then adding the industrial chemical melamine to increase protein levels. Melamine, used mainly in plastics and fertilizer, is high in nitrogen and can make milk appear to contain more protein, which is what quality tests measure.

The practice has been blamed for causing the deaths of four infants and sickening 54,000 others, with 10,000 still hospitalized.

Speaking on a television talk show late Sunday, the president of Bright Dairy said his company, one of the largest in the Chinese dairy industry, had been "too nice" toward milk collection stations that bought milk from farmers.

Large dairy companies typically buy raw milk gathered from small farmers at milking stations and collection centers, often by subcontractors responsible for safety testing. Safeguards were often lax and major milk producers have been criticized for not carrying out adequate testing.

The comments appeared aimed at restoring consumer confidence in the wake of the scandal that has dinged the reputation of some of China's best-known food companies.

"We thought they were operating in good conscience," Guo Benheng said on state television's economics channel.

"I'd say we made an innocent mistake, although an innocent mistake is still a mistake. We are definitely making corrections," Guo said, according to a transcript of his remarks posted on official Web sites Monday.

Appearing on the same show, the vice president of Mengniu Dairy, one of the country's largest, said the scandal had affected the company profoundly.

"This sort of thing just tears your heart apart," Zhao Yuanhua said.

The Yi family's lawyer, Dong Junming, said he turned the lawsuit in at Lanzhou's No. 2 Intermediate People's Court where clerks told him they would notify him Tuesday as to whether it would be accepted.

At least two other lawsuits have been filed against Sanlu -- the company at the center of the uproar - in recent weeks by parents of children suffering from kidney stones. It is not clear if courts will allow these suits to progress.

Product liability lawsuits are still relatively rare in China, and lawyers have complained of government pressure to withdraw from the cases.

Chinese milk powder and other food products have been banned from more than a dozen countries, worsening an increasingly painful downturn in China's crucial export sector and threatening household incomes in the vast, mostly poor countryside.

The scandal has struck a blow to China's efforts to build global brand names and establish healthy business practices.

Newspapers on Monday reported Chinese beverage-maker Hangzhou Wahaha Group was considering buying dairy assets from Sanlu Group, the milk-maker accused of attempting to cover up melamine tainting.

Sanlu is 43 percent owned by New Zealand dairy giant Fonterra Group, which has already slashed the value of its investment. China's government took over and suspended Sanlu's operations last month, and company heads have been detained for investigation.

China's dairy industry has sped ahead in recent years, far outpacing regulatory structures aimed at ensuring safety and quality. Since the tainting scandal broke last month, strict standards for allowable melamine levels in food have been set and 5,000 government inspectors dispatched to provide 24-hour supervision over the industry.

Last week, police arrested a dairy farmer accused of producing 600 tons of melamine-spiked protein powder. Eight dairy farm owners and milk buyers were also arrested for purchasing the powder.

[Associated Press; By CHRISTOPHER BODEEN]

Associated Press writer Cara Anna contributed to this report from Shanghai.

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