China orders tainted milk products off shelves

[September 20, 2008]  SHIJIAZHUANG, China (AP) -- China's national product safety agency said all batches of milk that have tested positive for an industrial chemical are being recalled and by Saturday the dairy sections of many stores were empty in Beijing and Shanghai.

China's food safety crisis widened Friday after melamine was found in milk produced by three of the country's leading dairy companies -- prompting stores, including Starbucks, to yank milk from their shelves.

Sipping from a carton of milk at a news conference, the chief financial officer of one of the companies, Mengniu, apologized for the tainted milk. But he insisted only a small portion of the company's inventory had been contaminated and said the tainted milk came from small-scale dairy farmers.

"Large-scale milk farms are very disciplined. They won't take the risk to do something like that," Yao Tongshan told reporters in Hong Kong. Yao sipped from a carton of milk in a display meant to bolster consumer confidence.

The crisis was initially thought to have been confined to tainted milk powder, used to make baby formula that has been blamed in the deaths of four infants and for sickening 6,200 other children.

But tests found melamine in samples of liquid milk taken from China's two largest dairy producers, Mengniu Dairy Group Co. and Yili Industrial Group Co., as well as Shanghai-based Bright Dairy. They join the discredited Sanlu Group, whose tainted milk powder and infant formula touched off public complaints.

The chemical, which is used in plastics and fertilizers, can cause kidney stones and lead to kidney failure.

The apparently widespread contamination has rapidly become a political headache for a communist government that hoped to be basking in popular adulation over last month's successful Beijing Olympics. Instead, the government is being forced to scramble to regain public confidence.

President Hu Jintao, in an address to senior Communist Party members, excoriated local officials for risking the public trust.

"Some officials have ignored public opinion and turned a blind eye to people's hardships, even on major problems that affect people's lives and safety," Hu said Friday in a largely dry policy speech published in state newspapers Saturday.

The State Council, the Cabinet, on Friday ordered hospitals to provide free treatment for sick infants and local officials to redouble efforts to remove all tainted products. Companies found to have produced contaminated milk will later have to reimburse the government for medical expenses, said the State Council order.

All batches that tested positive were being recalled, China's product safety watchdog said in a report on its Web site. It pledged to "severely punish those who are responsible."

Melamine, high in nitrogen, makes products with it appear higher in protein. Suppliers trying to cut costs are believed to have added it to watered-down milk to cover up the resulting protein deficiency.

No tainted infant formula has turned up in the United States, where authorities have inspected more than 1,000 retail markets mainly serving Asian communities. China is an importer of liquid milk so it is unlikely that milk from that country would have been shipped to the U.S.

But the Food and Drug Administration said it is stepping up inspections at ports as a precaution. Inspectors will be sampling bulk shipments of food ingredients from Asia that are derived from milk, such as milk powder and whey powder. The FDA also plans to issue a consumer alert warning people not to buy milk products from China on the Internet.

A senior dairy analyst said Chinese farmers were cutting corners to cope with rising costs for feed and labor.

"Before the melamine incident, I know they could have been adding organic stuff, say animal urine or skin," said Chen Lianfang of Beijing Orient Agribusiness Consultant Co. "Basically, anything that can boost the protein reading."

But he and others expressed skepticism that so many farmers would know to add melamine to milk. The chemical is not water-soluble and must be mixed with formaldehyde or another chemical before it can be dissolved in milk.

"Farmers can't be well-educated enough to think of melamine," Chen said. "There must be people from chemical companies contacting them and telling them it's a good idea."

The product safety agency and the Health Ministry declined to answer questions Friday about how widespread the practice of adding melamine to milk was believed to be.

"I don't know if this is an industrywide problem, but it is definitely not a single case. It is on a massive scale," said E.R. Hong, an executive of Hua Xia Dairy Ltd., a U.S.-owned dairy farm east of Beijing that has not been accused of supplying tainted milk.

The crisis highlights the growing influence of dairy products in the Chinese diet. Milk is not part of the traditional Chinese diet, but the country's economic growth and the increased availability of refrigeration have brought about a wide range of products, with flavored milk and sweetened yogurts among the most popular.

Though per capita consumption of dairy products in China is still low at 1.5 ounces per day, increasingly affluent Chinese consumers are paying more attention to their health and view milk as highly nutritious, particularly for children.

The crisis has raised questions about the effectiveness of tighter controls China promised after a series of food safety scares in recent years over contaminated seafood, toothpaste and a pet food ingredient tainted with melamine that was blamed for the deaths of dogs and cats in the United States. In 2004, more than 200 Chinese infants suffered malnutrition and at least 12 died after being fed phony formula that contained no nutrients.

Reactions to the latest recalls were immediate.

Starbucks Corp. said its 300 cafes in mainland China were pulling all milk supplied by Mengniu, though the Seattle-based company said no employees or customers had fallen ill from the milk.

Major Hong Kong grocery chains PARKnSHOP and Wellcome ordered Mengniu liquid milk removed from their shelves Friday, a day after products made by Yili, including milk, yogurt and ice cream, were taken off. Singapore suspended the sale and import of all Chinese milk and dairy products Friday.

Top Japanese food maker Marudai is recalling five of its products that may contain contaminated milk imported from China, officials said Saturday.

Marudai Food Co. is recalling the products as a precaution after the company found that the products, including cream buns, pork buns and creamed corn crepes used milk from Chinese dairy maker Yili, whose baby formula was among the tainted, the company said in a statement.

The five products were produced by Marudai's subsidiary in China's Shandong Province, the company said. The number of the products marketed and how many of them were consumed were not immediately known.

Meanwhile, two distributors of Sanlu baby formula said the company ordered them to pull its products off shelves in early July, weeks before it announced its milk powder was contaminated.

The statements raised further questions about when the company and government knew the formula was contaminated.

Sanlu received complaints as early as March and tests in early August found the milk powder contained melamine. However, no recall was ordered until Sept. 11, after its New Zealand stakeholder told the New Zealand government, which then informed the Chinese officials.

One of the distributors, Zhang Youqiang, said Sanlu ordered all formula with production dates from 2007 to July 2008 be yanked from shelves.

Phone calls to Sanlu rang unanswered Friday, and its Web site was not working. China's quality watchdog did not respond after asking that questions be faxed over.

[Associated Press; By GILLIAN WONG]

Associated Press writers Chi-Chi Zhang in Beijing, Dikky Sinn in Hong Kong, Alex Kennedy in Singapore and Bonnie Cao in Beijing contributed to this report.

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