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China milk scandal fallout builds

Sep 24 2008

China milk scandal fallout builds

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SCI-TECH

By Agencies

Sanlu is alleged to have tried to cover up the problem with its baby formula for several months [Reuters]

The New Zealand firm which co-owns the Chinese dairy company at the centre of a growing health scare has said it is appalled that it was not informed of the issue for several months.

The comments from executives of the giant Fonterra dairy group come as alarm over potentially contaminated dairy products continues to spread well beyond mainland China.

Countries across Asia, Africa and South America have imposed bans on imports of Chinese milk products in the wake of the scandal that has so far led to the deaths of at least four Chinese infants and sickened 54,000.

The scare centres on milk contaminated with the toxic chemical melamine, which has now been found in products made by at least 22 Chinese companies.

Melamine, which is normally used in the manufacture of plastics, has a high nitrogen content that can fool quality tests for protein content in milk.

It is thought to have been added to watered-down milk at some point in the supply chain to mask the effects of dilution.

Dairy crisis timeline

According to CCTV, Sanlu first learned on June 1 that its milk had been tainted with melamine. Five babies were hospitalised, suffering from kidney stones

But it was not until August 2 that Sanlu began to do anything to prevent the sale of the milk, notifying the local government in Shijiazhuang that its milk was tainted.

On August 6 Sanlu pulled the milk from its distributors, but did not announce a public recall.

Finally, on September 11, Sanlu publicly recalled 700 tonnes of its baby formula, while the government vowed serious punishment for those involved.

If consumed by humans it can cause kidney stones and other potentially fatal complications, especially in small children.

On Wednesday Andrew Ferrier, Fonterra's chief executive, told an annual results meeting in Wellington that he did not believe Sanlu, the Chinese dairy company at the heart of the scandal, would recover from the damage.

He said that Sanlu, which is 43 per cent owned by Fonterra, had been taken over by the Chinese government which had since shut down its operations.

Fonterra, which trades dairy products in 140 countries around the world, planned to introduce "comprehensive testing for every conceivable poison" in all milk it purchases, Ferrier said.

Ferrier said he was "appalled" if Chinese media allegations prove true that Sanlu had received complaints about its infant formula as early as December last year, but did not alert Chinese authorities until the beginning of August.

Some 54,000 babies have been sickened as a result of tainted milk [AFP]

He declined to speculate on suggestions that the scandal may have been covered up because first reports of the contamination coincided with the start of the Beijing Olympic games.

Fonterra says it first alerted authorities in the Chinese province of Hebei, home to Sanlu's headquarters, but were told the problem was being dealt with

Ferrier said that Fonterra pushed for an immediate public recall of Sanlu infant formula from that time, but a recall was only ordered on September 9 after the New Zealand government alerted central government authorities in Beijing.

"We pushed as hard as we could in the system," Ferrier told reporters in Wellington.

"We are deeply, deeply saddened that this could happen and apologise to all the Chinese families affected."

His remarks echoed a statement from Henry van der Heyden, Fonterra's chairman, who said the revelations over Sanlu's apparent inaction over the crisis were "deeply concerning" and referred to the contamination as a "criminal event".

"That Fonterra was not informed earlier is frankly appalling," he said.