2008 Chinese milk scandal

Stripped shelves in a supermarket in China as a result of the contamination

The 2008 Chinese milk scandal is a food safety incident in mainland People's Republic of China involving milk and infant formula which had been adulterated with melamine. With China's wide range of export food products, the scandal has affected countries on all continents. By 22 September, nearly 53,000 illnesses, over 12,800 hospitalisations, and four infant deaths caused by kidney stones and other renal failure had been reported. The chemical appeared to have been added to milk in order to cause it to appear to have a higher protein content. The same chemical was also involved in a series of pet food recalls in 2007. In a separate incident, watered-down milk resulted in 13 infant deaths from malnutrition in China in 2004.

After the initial focus on Sanlu Group, the market leader, government inspections revealed the problem existed to a lesser degree in products from 21 other companies, including Mengniu, Yili, and Yashili. The issue has raised concerns about food safety and political corruption in China, and it has also damaged the reputation of China's food exports; at least 11 countries having stopped all imports of Chinese dairy products. A number of arrests occurred as a result of the scandal, and the head of Sanlu, several provincial government officials, as well as the Director of the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) have been fired or forced to resign in response to the incident. The World Health Organisation referred to the incident as one of the largest food safety events it has had to deal with in recent years. It says the crisis of confidence among Chinese consumers would be hard to overcome.

Melamine

Main article: Melamine

Melamine is a man-made substance commonly employed in a variety of industrial products and processes, including the manufacture of synthetic countertops, dry erase boards, fabrics, glues, housewares, flame retardants and dyes. The nitrogen-rich molecule is sometimes illegally added to food products in order to increase their apparent protein content. It has also been employed as an additive to cattle feed to boost its nitrogen content, appearing in soy meal, corn gluten meal and cottonseed meal. Melamine is known to cause renal and urinary problems in humans and animals when combined in the body with cyanuric acid, sometimes present in drinking water and in animal feed, so its use in food production is banned in China and elsewhere.

Common nitrogen-based protein level tests used in China, such as the Kjeldahl and Dumas methods, fail to distinguish between melamine and naturally occurring milk proteins, allowing the protein levels to be falsified. Introduced into milk, it can help conceal its fraudulent dilution with water. Melamine adulteration of food products had also made headlines when pet food was recalled in Europe and the U.S. in 2007.

How it got into the milk

The World Health Organisation (WHO) said that "it appears that melamine can be found in a variety of milk and milk products at varying levels, from low ppb to ppm ranges." One academic suggests it may have been part of the food chain in China for a long time, as cyromazine (a melamine derivative) is a very commonly used pesticide in China. Cyromazine is absorbed into plants as melamine, and may therefore be present in the food chain, including in poultry, eggs, fish, and dairy products.

It is not known where in the supply chain the melamine was added to the milk. The chemical is not water-soluble and must be mixed with formaldehyde or another chemical before it can be dissolved in milk. Caijing reported that 99% pure industrial grade melamine, costing ¥11,000 (US$1,600) per tonne, was too expensive to put into milk for the purposes of hiding dilution. They speculate that the melamine found in the tainted milk would have come from impure industrial melamine priced at ¥700 per tonne, and that Sanlu's baby formula melamine content was a result of replacing real milk protein with low cost vegetable protein (such as low grade soya powder), which had large amounts of low grade industrial melamine as filler. Low grade impure melamine would contain other more harmful material, such as urea, ammonia, potassium nitrate, and sodium nitrite. Among these, sodium nitrite is a known carcinogen.

Caijing reported that "spiking fresh milk with additives such as melamine" was no longer a secret to Hebei dairy farmers for the past two years. Due to fierce competition for supplies, and the higher prices paid by Mengniu and Yili, Sanlu's inspection system was compromised "as early as 2005 and allowed milk collection stations to adopt unscrupulous business practices". During the same time government supervision was "practically nonexistent."

Toll

On 17 September 2008, Health Minister Chen Zhu stated that tainted milk formula had "sickened more than 6,200 children, and that more than 1,300 others, mostly newborns, remain hospitalised with 158 suffering from acute kidney failure". By 23 September, about 54,000 children were reported to be sick and 4 had died. Nearly 13,000 Chinese infants had been admitted to hospital, 104 of them in a serious condition. An additional 10,000 cases were reported from the provinces by 26 September. A World Health Organisation official said 82 percent of the children made sick by the formula were 2 years of age or younger. Non-human casualties included a lion cub and two baby orangutans which had been fed Sanlu milk powder at Hangzhou Zoo.

The government said on 21 September it would no longer issue updated figures. Reuters compiled figures reported by local media across the country, and said the toll stood at nearly 94,000 at the end of September, excluding municipalities. Notably, 13,459 children had been affected in Gansu, Reuters quoted Xinhua saying. Henan had reported over 30,000 cases, and Hebei also had nearly 16,000 cases. More than 10,000 children are still hospitalised, with eight in serious condition according to the Chinese Health Ministry.

Companies

Sanlu

The scandal began with revelations of contamination of Sanlu milk products. The New Zealand dairy cooperative Fonterra, which owns a 43% stake in Sanlu, said they were alerted to melamine contamination on 2 August (almost a month before the issue became public), and claimed to have pushed hard for a full public recall. Although there was an immediate trade recall, Fonterra said that local administrators refused an official recall.

Warning signs ignored

The bulletin board of the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) indicated a rare occurrence of kidney stones in children – all causally traced to Sanlu milk formula – was flagged by at least one member of the public in June 2008 and by a urologist in a paediatric hospital on 24 July 2008. Neither received definitive replies. The paediatrician, who specifically asked the AQSIQ to refer his observations to epidemiologists, was asked to refer his query to the Health department.

In June, Jiangsu media reported a two-month surge in the number of babies diagnosed with kidney disease; in July, a parent of a sick baby in Hunan questioned Sanlu’s milk powder and complained to the AQSIQ. Gansu Province sent a report to the Ministry of Heath on 16 July to alert that one local hospital had identified an increase in the incidence of kidney ailments among babies in the months earlier, and that most victims had consumed Sanlu’s baby formula. The health ministry sent investigators to Gansu in early August.

Enter NZ Government

Fonterra notified the New Zealand government on 5 September and three days later, the Prime Minister Helen Clark had Beijing officials alerted directly. News reports began circulating in China on 9 September, the news broke internationally a day later by Reuters. The state-controlled media report did not initially identify the company involved, postings on Tianya.cn, a Chinese social portal, named Sanlu as the culprit. Sanlu initially denied the allegations.

Cover-up allegations

According to accounts confirmed by media reports and health officials, the company tried to buy off critics and cover up the contamination. In a memo dated 11 August, Beijing-based public relations agency Teller International advised Sanlu to seek cooperation with major search engines to censor negative information. It was reported that the agency had repeatedly contacted key account staff at Baidu and proposed a ¥3 million (US$440,000) budget to screen all negative news. After the memo began circulating on the internet, Baidu denounced in a communiqué on 13 September 2008 that they had been approached on several occasions by said agency, saying that the proposal was firmly rejected as it violated their corporate principles of unbiased and transparent reporting. Fonterra said that it was following up on reports of this PR strategy.

Helen Clark said of the local government: "I think the first inclination was to try and put a towel over it and deal with it without an official recall." Western media have speculated that China's desire for a perfect summer Olympic Games contributed to the delayed recall of the baby milk, alleging that guidelines issued to Chinese media reporting food safety issues, such as cancer-causing mineral water, were "off-limits" although the Central government denied this. Hebei provincial vice-governor said his administration was only notified by Shijiazhuang on 8 September. However, a journalist at Southern Weekend wrote an investigative report in late July about infants who had fallen ill after consuming milk powder from Sanlu. His report was never published. Six weeks later, senior editor Fu Jianfeng revealed on his personal blog that this report on poisonous milk powder had been suppressed by authorities. While this was happening, Sanlu was honoured in a national award campaign called "30 Years: Brands that Have Changed the Lives of Chinese." The press release on the award, written by a senior public relations manager at Sanlu, passed as news content on People's Daily and in other media.

A State Council investigation revealed that Sanlu began receiving complaints about sick infants as far back as December 2007, but did no tests until June 2008. Leading government officials in Shijiazhuang city were said by the State Council to be complicit: they had failed to report the contamination to provincial and state authorities (until 9 September) in violation of rules on reporting major incidents involving food safety. According to the People's Daily, Sanlu wrote a letter to Shijiazhuang city government on 2 August 2008, asking for help to "increase control and coordination of the media, to create a good environment for the recall of the company's problem products....to avoid whipping up the issue and creating a negative influence in society."

Sanctions

On 15 September, the company issued a public apology for the contaminated milk powder; Sanlu was ordered to halt production, and to destroy all unsold and recalled products. Authorities reportedly seized 2,176 tons of milk powder in Sanlu's warehouses. An estimated 8,218 tons of product had been recalled, and another 700 tons was on its way back to Shijiazhuang.

Tian Wenhua, Chairman and General Manager of Sanlu and Secretary of the Sanlu Communist Party chapter was stripped of her party and functional posts during an extraordinary meeting of the Hebei provincial standing committee of the CCP; four Shijiazhuang officials, including vice mayor in charge of food and agriculture, Zhang Fawang, were reportedly removed from office. Shijiazhuang Mayor Ji Chuntang resigned on 17 September. Li Changjiang, minister of the AQSIQ, was forced to resign on 22 September after the State Council inquest concluded that "there has been negligence in supervision", and said that the leader should take chief responsibility. Investigators also blamed the Shijiazhuang government. Local Party Secretary Wu Xianguo was fired on the same day.

Arrests

Sanlu GM Tian was charged under Articles 144 and 150 of the criminal code. A spokesman for the Hebei Provincial Public Security Department said police had arrested 12 milk dealers and suppliers who allegedly sold contaminated milk to Sanlu, and six people were charged with selling melamine. 300 kg of suspicious chemicals, including 223 kg of melamine, were confiscated. Among those arrested were two brothers who ran a milk collection centre in Hebei for allegedly supplying three tonnes of adulterated milk daily to the dairy; the owner of another collection centre which resold seven tons of milk a day to Sanlu, was arrested, and his operation was shut down.

Zhang Yujun (alias Zhang Haitao), a former dairy farmer from Hebei, produced more than 600 tons of a "protein powder" mixture of melamine and maltodextrin, from September 2007 to August 2008 in a village in eastern Shandong. He and eight other traders, cattle farm owners and milk purchasers who bought the powder from him were arrested in early October, bringing the total to 36.

Effect on the company

The value of the company plunged as a result of the scandal. On 24 September, Fonterra announced that it had written down the carrying value of its investment by NZ$139 million (two-thirds), reflecting the costs of product recall and the impairment of the 'Sanlu' brand "as a direct consequence of the criminal contamination of milk in China". By 27 September, China Daily reported that Sanlu was close to bankruptcy, and might be taken over by the Beijing Sanyuan Foods Company. A Sanyuan source confirmed the company was in discussion on "a potential acquisition".

Lawsuits against Company

Parents from Henan province have filed a lawsuit against Sanlu, seeking $22,000 in compensation for medical, travel and other expenses incurred after their 14-month-old baby developed kidney stones. The child is still being hospitalised and in intensive care. While a group of 107 lawyers who have volunteered to help the affected families, officials from central Henan province have asked them to stop their attempts. On 10 October, a second lawsuit has been filed against a Sanlu dairy company at the heart of the tainted milk crisis. The Guangzhou Intermediate People's Court has yet to accept the lawsuit, which seeks $132,000 in compensation. There are also plans by representatives and lawyers of the parents to sue the Dairy Association in China for failing to supervise its members.

Chinese majors

On 16 September, the AQSIQ released test of samples from 491 batches of products sold by all 109 companies producing baby milk powder. It said that all 11 samples from Sanlu failed the melamine test. Sanlu, whose products sell at half the price of equivalents on the market, recorded the highest levels of contamination among all the samples tested, at 2,563 mg/kg or parts per million ("ppm"). Products from 109 producers were tested, and tainted samples were found among 21 other suppliers (other than Sanlu), where concentrations ranged from 0.09 to 619.00 ppm. There was melamine contamination in 10% of samples from Mengniu and Yili and 6% of those from Bright Dairy.

On discovery that liquid milk was also contaminated, the three major producers were all stripped of their status as 'Chinese national brands'. Yili, Mengniu and Bright Dairy & Food Co. recalled tainted milk powders and apologised in separate statements. Mengniu recalled all its baby formula, and trading in its shares on the Hong Kong Stock Exchange was suspended on 17 September. Shares in other dairy companies fell strongly the next day. Mengniu's CFO attempted to reassure consumers by offering a no-quibble refund on all products, and by drinking liquid milk in front of reporters in Hong Kong. He also said that its export products were less likely to be contaminated.

On 30 September, the AQSIQ announced test results of a further 265 batches milk powder produced by 154 different companies prior to 14 September, where it found 31 batches produced by 20 domestic dairy companies were tainted with melamine.

Foreign dairy joint-ventures

Mengniu-Arla, joint-venture between Arla Foods, a large Danish/Swedish co-operative and Mengniu. On 16 September 2008 Arla CEO Peder Tuborgh said that the contamination was a "national catastrophe". He announced that production was stopped after three out of 28 tests taken from Mengniu showed traces of melamine, and contaminated batches had been recalled. On 22 September, Jais Valeur, Arla Executive Director, stated that the joint venture was focusing on re-establishing the safety of, and confidence in, its locally produced milk powder

Impact

Chinese industry

Central government ordered the testing of product of all dairy producers, and to this end, some 1,400 teams of inspectors (5,000 in all) were dispatched. The domestic Chinese market has grown at an average annual rate of 23% since 2000. In 2006, milk production reached 30 million tons, ten times of the volume a decade before. It was valued at some ¥122 billion (US$18 billion) in 2007, and consumers have severely lost confidence in the industry.

The revelations have exposed structural problems of inadequate production volume, inherent quality and poor production methods. The Inner Mongolia region produces over one-fourth of China's milk, and Mengniu and Yili have invested millions to establish state-of-the-art dairy facilities in its capital, Hohhot. The companies still rely on small-scale farmers for over 90% of their production because of the capacity constraint of the modern facilities. Both companies were said by farmers and agents to have habitually purchased milk which failed quality tests, for only two-thirds the normal price. A new policy was put in place on 17 September to stop that practice.

Use of other potentially harmful chemical additives such as preservatives and hydrogen peroxide has been reported by independent media. Quality tests can be falsified with additives: peroxide is added to prevent milk going bad; industrial vegetable oil is emulsified and added to boost fat levels; whey is used to increase lactose content. However, such means and technology are seldom available to ordinary farmers, meaning that the procurement chain is also implicated - milk agents are often politically well connected. The big dairy producers were complicit in producing "test-tube milk."

Consumer panic resulting from the contaminated milk has lessened demand for dairy products, causing hardship to more than 2 million Chinese farmers who have nowhere to sell their milk, and no means to support their dairy cows. Farmers have been pouring away milk, and contemplating selling cows into a buyerless market.

Since the scandal erupted, sales have fallen by 30-40% on a comparative basis, according to the Chinese Dairy Association. The Association estimates that the financial effect of the order of ¥2 trillion, and forecasts that confidence may take up to two years to be fully restored. In an effort to prop up sales and retain their market share, dairy firms have cancelled their common accord not to use promotions in order to fight the sales decline: substantial discounts (including BOGOF), free gifts and other point of sale incentives were being offered to shoppers. Their new products are conspicuously labelled "safety inspection passed" to allay consumer fears.

Foreign operations in China

Mengniu, which had struck a deal with Starbucks, was replaced by Vitasoy when the coffee retailer abandoned milk in favour of soya milk in its China operations. KFC also suspended selling Mengniu milk.

Tokyo-headquartered Lotte Group, a major snacks maker, recalled its popular chocolate-filled Koala's March cookies in Hong Kong and Macau because of contamination, and promised to "look deeply into all the details of the manufacturing process" in order to preserve customer confidence. The range was also ordered off Dutch and Slovakian shelves. Its Chocolate Pie was seized when samples tested positive in Malta.

On 29 September 2008 British confectionery group Cadbury, which has three Beijing factories, withdrew all of its 11 chocolate products made in there on suspicion of contamination with melamine. The recall affected the mainland China markets, Taiwan, Hong Kong and Australia. Tests done in Hong Kong found out that excessive amounts of melamine were discovered in China-made Cadbury products such as Cadbury Dairy Milk Cookies Chocolate and Cadbury Dairy Milk Hazelnut Chocolate.

On 30 September 2008, Unilever started recalling its Lipton milk tea powder, which used Chinese milk powder as its raw ingredient, after the company's internal checks found traces of melamine in the powder. On the same day, Heinz discontinued the use of Chinese milk in making their products after recalling cases of baby cereal in Hong Kong after discovering they contained melamine.

On 2 October 2008 the Taiwan Health ministry announced that six types of milk powders produced in China by Nestle contained traces of melamine. Nestle has announced that it will begin a recall of milk products produced in China.

Olympics

There were concerns that dairy products consumed during the 2008 Summer Olympic games may have been contaminated. Li Changjiang, the then Director of AQSIQ reassured the international community that all the food, including dairy products, was indeed safe. "We took special quality management measures aimed at food supply for the Games."

Outside China

Chinese Customs said that exports of dairy products and eggs in 2007 were valued at US$359 million, a year-on-year increase of 90%. Since the news of the melamine contamination began to circulate, at least 25 countries stopped importing Chinese dairy products. A number of countries have imposed blanket bans on Chinese milk products or its derivatives —among which are Bangladesh, Bhutan, Brunei, Burundi, Cameroon, Chile, Colombia, Gabon, India, Ivory Coast, Maldives, Mali, Nepal, Papua New Guinea, South Korea, Suriname, Tanzania, Togo, and the United Arab Emirates — joining Indonesia, Taiwan, Japan, Singapore and Malaysia which have imposed specific bans on Chinese dairy products which have tested positive for melamine.

The popular and ubiquitous White Rabbit Creamy Candy was blacklisted after tests by health authorities around the world identified it as being being contaminated. In Europe, the French authorities ordered all Chinese dairy products off shelves; Tesco removed White Rabbit as a precaution from its stores in China, Malaysia and the United Kingdom. In the United States of America, which was otherwise unaffected by the scares, the US distributor of White Rabbit candies recalled the product when samples found in Hartford showed traces of melamine. The candy's maker, Guan Sheng Yuan issued a recall to the 50 countries to which it exported.

Country/Regions	Products (*see official list)	Reaction
Australia	White Rabbit, Koala Biscuits, Kirin milk tea, Cadbury eclairs	Food Standards Australia New Zealand issued a general warning on White Rabbit candies after testing found melamine contamination at 180 ppm. The authority also pulled out Lotte Koala's March biscuits from all stores throughout the country, as a precaution after discoveries of melamine were found in them overseas, and withdrew Kirin milk tea after Australian tests showed contamination.
Argentina	Yili, Cadbury, Koala's March, etc.	The National Administration of Medicines, Food and Medical Technology (ANMAT), decided as a preventive measure, to ban the import and sale of several products of Chinese origin that contain milk or any of its derivatives. The ban affects 48 different products, ranging from powdered milk to candies and cereal bars. The ANMAT published lists with the products and issued a general warning to the public to abstain from consuming them.
Bangladesh	Cadbury Dairy Milk with various other products	Bangladeshi food and drugs authority administered by the Ministry of Food reacted on the issue. A minister recommended avoiding Cadbury's products following a recall elsewhere of the company's China-made chocolate. The Secretary of Food Department said that whilst they were testing, they would only advise people to avoid it for want of enough evidence to ban this product.
Canada	Nissin Cha Cha Dessert mix	The four largest manufacturers of infant formula in Canada confirmed to the federal department that they did not use milk ingredients from China.The Canadian Food Inspection Agency said it was satisfied that there was no evidence the contaminated H.J. Heinz product found in Hong Kong was ever imported to Canada.
Chile	none	Chile announced the prohibition of any type of Chinese food products that contain Chinese milk effective 26 September 2008, and removed more than 2,000 packages with these items in order for analysis, although the Ministry of Health said that there was no evidence "that has contaminated milk in Chile"
European Union	Koala's March, Ritz Crackers	On 25 September 2008 the EU announced a ban on imports of baby food containing Chinese milk. The European Commission also called for tighter checks on other Chinese food imports;
Hong Kong	various*, incl Yili and Nestlé liquid milk, Cadbury Dairy Milk	Being one of the front-line territories, Hong Kong made a number of 'first' discoveries of melamine contamination. Friesland Foods recalled all of its plastic-bottled 'Dutch Lady' milk; authorities ordered a recall of Yili products after 8 out of 30 tested positive for melamine. The first multinational brand implicated in the affair was Nestlé, whose Dairy Farm Pure Milk was one of six products found to contain traces of melamine at 1.4ppm. The Hospital Authority set up special unit at the Princess Margaret Hospital to deal with potential cases. Hong Kong's first victim was diagnosed on 20 September. A total of five children were diagnosed with kidney problems. At least three of the victims came into contact with contaminated milk whilst living on the mainland. On 26 September 2008, Hong Kong government announced it had found traces of melamine in two more products made in mainland China which included another multinational brand, H.J Heinz, which recalled their Vegetable Formula Cereal. Several Cadbury's chocolate products were also recalled after testing positive.
India	n/a	On 25 September 2008 India announced the ban on import of dairy items, including milk and milk products, from China for three months following reports of contamination.
Indonesia	various*, incl M&M's, Oreos, and Cadbury's Dairy Milk	The Health Ministry of Indonesia imposed an import ban on dairy products from China as a preventive measure, while offices of the Indonesian Food and Drugs Supervisory Agency (IFDSA) gave orders to withdraw Chinese dairy products from stores. The government of Indonesia also withdrew the local distribution permit given to the only dairy product from China. The health ministry said it had found melamine in twelve products, including products from Mars, Kraft Foods and Cadbury's. Mars disputed the Indonesian tests as being "impossibly high", and inconsistent with results from agencies across Asia and Europe.
Japan	Marudai (recall), Chocolate Pillows, various products	Japan's central government was urged to suspend Chinese dairy imports by regional authorities. All importers were instructed by the government to test dairy imports from China for melamine or face huge fines and penalties.
Laos	various products	On 28 September 2008, the Laotian government stopped all imports of milk products, such as milk-flavoured toffees, milk and milk powder from China. Tests done on samples taken from markets of Vientiane revealed two milk products containing melamine.
Macau	various*	On 23 September 2008, a 16-month-old boy in Macau who is said to have been brought up on Heilongjiang-manufactured Nestlé powder was diagnosed with kidney stones. On 30 September 2008 Unilever began recalling Lipton milk tea powder after found traces of melamine during the company's internal tests.
Malaysia	n/a	Malaysia had banned dairy items from China in early 2008 because of foot and mouth disease in Chinese cattle. Although it had not yet ascertained the full extent of products affected, the Malaysian Health Ministry extended the ban to include candies, chocolates and all foods containing milk on 23 September 2008. Dutch Lady Milk Industries, whose milk in plastic bottles was tested positive in Singapore, moved to reassure consumers that its Malaysian products were unaffected - the tainted range was from China, and were not sold in Malaysia.
Myanmar	milk and infant powder (9 brands)	Chinese dairy goods are widely sold in Myanmar, but the Government issued no official warning and locals remain ignorant of the contamination. Yashili and Suncare recalled milk powder exported to Myanmar. On 30 September 2008 the Myanmar government banned on all Chinese milk products throughout the country.
New Zealand	Wahaha	Tatua Co-operative Dairy Co, a large exporter of lactoferrin was alerted that melamine had been detected in its own product. The company confirmed contamination at less than four parts per million (4ppm), saying it would investigate.
Peru	White Rabbit Candy, various products	On 1 October 2008 the authorities in Peru began confiscating Chinese milk products from shops mostly in Lima's Chinatown district. Products included White Rabbit Candy, cookies, buns, chocolates and other milk-based foodstuffs. Already five types of milk-based products have been banned in Peru.
Philippines	Yili, Mengiu, Jolly Cow	On 24 September 2008, The Philippines prohibited the importing and sale of Chinese milk, and asked stores to remove Chinese milk products from sale, and drop them off at state centres for inspection. The customs office said that there will be more strict controls on all Chinese food products. Senator Pia Juliana Cayetano, the head of the health and demographics committee, warned that some retailers might repack powdered milk for resale in smaller bags to unsuspecting customers. The scares also resulted in fear of milk shortage in the country.
Qatar	n/a	Local distributors reaffirmed that "almost nothing... from China" ever makes it to Qatar, thus dairy and baby food products sold in the states were unlikely to be affected by melamine contamination. Qatar imposed a ban on the import and sale of White Rabbit candy, a product not officially sold in the state.
Russia	Milk powder, various products	On 30 September 2008, Russia banned the imports of dairy products from China. Russia authorities seized two tonnes of imported dairy products made in China which contained melamine. On 3 October, milk powder containing melamine was discovered in Tomsk.
Slovakia	Koala, Pepero	Unsafe levels of melamine were found in chocolate biscuits and snacks not yet commercialised. The authorities found the products contained three to four times the legal limit of melamine. Also an illegally-imported milk drink was found to contain a high concentration melamine.
South Korea	Tatua, M&M, Snickers, Kit Kat, various products	The South Korean government declared an official import ban on all Chinese dairy products after traces of melamine were discovered in a sample of the popular Mi Sarang Custard snacks produced in China which are distributed by Haitai. The Korean Food and Drug Administration ordered all current Chinese dairy products on the market to be recalled and destroyed. Officials found melamine contamination in Nabisco Ritz cheese sandwiches and in rice crackers made by a Chinese company. Authorities discovered melamine in lactoferrin imported from New Zealand Tatua Cooperative Diary Company.
Taiwan	various, Mr. Brown Coffee, Nestle products	On 22 September, Taiwan suspended imports of all mainland Chinese milk products and vegetable-based proteins until the problem of contamination in Chinese milk supplies had been addressed. On 23 September, Premier Liu Chao-shiuan announced that Taiwan would dispatch a delegation of experts to China on 27 September to better understand the contamination problems. The Department of Health failed four Taiwanese companies' products for melamine; the Taipei City falsely named 14 bakeries as being users of contaminated milk - tests showed that none had used contaminated products. The Liberty Times reported that the bakers were angry that the government had identified the companies and threatened to sue for damage. The United Evening News reported that a two-year-old girl, who had recently arrived in Taiwan from Guangzhou, may be the first victim in Taiwan when she was diagnosed with signs of a hardening kidney on 24 September. One citizen voiced concern that President Ma Ying-jeou's promise for closer ties with China would bring in more tainted Chinese products to Taiwan. Criticism of the Kuomintang administration intensified during the last week of September, after the Minister of the Department of Health, led by Lin Fang-yue raised the acceptable levels of melamine in food products from zero to 2.5 ppm. The public outcry subsequent to the move forced Lin to resign. His successor, Yeh Chin-chuan, announced a return to the original zero-tolerance policy to melamine. The Department of Health forced Nestle to delist six Neslac and KLIM products on 2 October for containing minute traces of melamine, despite the minister said they did not pose a significant health risk. A DPP whip criticised the government's policy policy and testing standards on melamine as being "unclear to nobody". Nestlé issued a statement saying it failed to understand the delisting request. It argued that "the 0.05 ppm detection limit currently applied in Taiwan is up to 50 times below recognized and accepted international standards", and the delisting would cost the company NTD1 billion. On 30 September, Liu Chao-shiuan told parliament that Taiwan would demand an apology and possible compensation from China over imported milk tainted with melamine.
Tanzania	milk powder	Tanzania reported on 23 September that it had suspended Chinese dairy product imports and seized about 34 tonnes of milk powder (not baby formula) from China. Tanzania Food and Drugs Authority temporarily stopped issuing of permits for importation and distribution of milk and products containing milk from China, and ordered all businesses with relevant products to surrender their stocks.
Thailand	Dutch Mill	On 30 September, Thai authorities introduced restrictions on Chinese dairy products after discovering melamine on two samples of imported Chinese milk powder. On the previous day, Thailand impounded about sixty tonnes of contaminated milk powder.
United Arab Emirates	n/a	On 25 September, United Arab Emirates enacted a ban on all dairy products in China. All supermarkets and food outlets have been directed to remove the products from their shelves.
United Kingdom	n/a	Tesco stopped selling White Rabbit Creamy sweets and candies in its UK stores.
USA	Mr. Brown, Blue Cat	Concerned over the possibility of contaminated milk powder being sold in speciality markets serving the Asian community in the United States, the Food and Drug Administration (FDA) issued an advisory on 12 September 2008, while assuring consumers that no formula approved for sale in the U.S. was made in China. All manufacturers and marketers of baby formula in the U.S. assured the FDA that they received no ingredients from China.
Vietnam	milk powder	On 24 September, Vietnam banned all Chinese dairy products after finding melamine in a shipment of 101 tons of powdered milk from China.On 3 September Vietnam health ministry reported the discovery of melamine in eighteen food products imported China and three other countries in the region. On 4 September, the Vietnam authorities announced that schools would stop serving milk until the origins of their supplies had been certified.

Response

International agencies

The US FDA said that while in general, food containing melamine below 2.5 parts per million did not raise concerns, its scientists were "currently unable to establish any level of melamine and melamine-related compounds in infant formula that does not raise public health concerns." The European Food Safety Authority (EFSA) warned that children who ate large amounts of confectionery and biscuits with high milk content could theoretically be consuming melamine at more than three times above prescribed EU safety limits (0.5 mg/kg of body weight). The EFSA said that children with a mean consumption of products such as milk toffee, biscuits and chocolate containing contaminated milk powder would not be at risk, and that adults would not be at risk even in the worst case scenarios.

The World Health Organization, which was only notified on 11 September, asked Beijing why it took so many months for the scandal to become public, and to establish whether failure was deliberate or due to ignorance. WHO's China representative, Hans Troedsson, said the issue of who knew what and when was critical. "It is important to know if information was withheld, where and why it was withheld, was it ignorance by provincial authorities or was it that they neglected to report it? Because if it was ignorance, there is a need to have much better training and education ... if it is neglect, then it is, of course, more serious."

Following a spate of mass national bans, the WHO urged national food safety authorities on 25 September 2008 to test Chinese dairy products for health risks before slapping on import bans or recalls. WHO and UNICEF also jointly decried the "deliberate contamination of foods intended for consumption by vulnerable infants and young children", calling it "particularly deplorable." On 26 September, the WHO warned health officials around the world to be alert for dairy products of Chinese origin that could be tainted. Anthony Hazzard, the Western Pacific director of the World Health Organization said countries had been advised by the International Food Safety Authorities (INFOSAN) to focus particularly on smuggled formula.

The WHO referred to the incident as one of the largest food safety events it has had to deal with in recent years. It says the crisis of confidence among Chinese consumers would be hard to overcome. It saw regulation failing to keep pace with the rapid development of the food and industrial production as opening the gates to all types of misbehaviour and malfeasance. The spokesman said that the scale of the problem proved that it was "clearly not an isolated accident, [but] a large-scale intentional activity to deceive consumers for simple, basic, short-term profits."

WHO Director-General Margaret Chan reminded that Chinese mothers that babies which were not breastfed were being deprived of the best nutrition offered by nature, while risking being exposed to the effects of melamine. She added: "We need to try our very best to tell [mothers] the difference [between breast milk and formula]. Of course breastfeeding is the best food for babies." Chan said the melamine-in-milk scandal showed "the impact and power of globalisation" in food distribution and highlighted "the importance of seamless cooperation from farm to consumer."

Chinese public

Anger at Sanlu

File:D1-5822.jpg

An example of the parodies which have been circulated by Chinese citizens angry over the contamination

The case has brought anger and resentment at milk producers, and has sown uncertainty and confusion among the population: queues have formed outside Sanlu's offices for refunds. The Sanlu website was hacked several times and its name as displayed in the header bar changed to 三聚氰胺集团 ("The Melamine Group") in a play of words on the character "三" (number 3), which is the first word of Sanlu's Chinese name: 三鹿 (Three Deer); "Melamine" was also added as a product name by a hacker. As has been increasingly common practice, netizens have vented their anger on Internet bulletin boards. Prevalent food scares have increased the number of on-line parodies circulated by netizens. Those inspired by Sanlu have been along themes of passing the buck, stones, or the virtues of not being able to urinate. Celebrities who have endorsed dairy products have also been ridiculed in photoshopped images.

Before the government offered free medical treatment, some parents had reportedly spent small fortunes on medical care for their sick children. Children who fell ill before the scandal broke on 12 September are not entitled to free medical care offered by the State. Parents of at least two such victims, one from Henan and one from Guangdong, have filed writs against Sanlu despite government pressure.

Anger at political leaders

There is growing resentment that country's leaders are not troubled by the food security turmoil faced by ordinary citizens: in a speech delivered by Zhu Yonglan (祝詠蘭), Director of the State Council Central Government Offices Special Food Supply Centre (CGOSFSC) in August 2008, Zhu disclosed that her firm which was set up in 2004 to source high-quality, all-organic foodstuffs from farms working under the strictest guidelines, for supply to top political leaders, their families and retired cadres.

"The State Council Party and State Organisations Special Food Supply Centre... is supported by the State Council Logistics Base, Central Security Bureau farms, and supply bases spread over all 13 provinces, municipalities... and autonomous regions. These bases supply the 94 ministries’ and commissions’ veteran cadres with high quality organic food products... [Our] products accord with the highest standards."

...Everyone knows that at present average production facilities use large quantities of chemical fertilizers and pesticides. Antibiotics and hormones are used in the raising of animals. Aquatic animal products are raised in polluted waters. All of these toxins end up in the final food products (all kinds of produce, meat, dairy products etc.). It goes without saying that these are harmful when consumed by humans."

Zhu Yonglan, Director of the CGOSFSC - speech to Shandong KR Biomedical, 18 August 2008

Ordinary Chinese are asking whether the government ever intends to do more than just apologise, after Premier Wen Jiabao apologised, saying he felt "extremely guilty" about the poisoned milk products, just as he had previously asked the people's pardon for the deaths of coal miners, the polluted drinking water, and train passengers stranded by the authorities' inadequate response to the severe snowstorm during the New Year.

Author Qin Geng (秦耕) said:"The big picture in this case was the interest of one-party rule above anything, not that they would put the safety of the people first". Qin concluded what the Chinese public were told by the state-controlled media the contamination of milk is a well orchestrated process, and they are "very sad, very frightened and very concerned."

Quest for milk substitutes

Poorer consumers reliant on local milk powder, which is approximately half the price of imported brands, have been left without alternatives to feed their children. Many have now lost faith in local brands, and others are uncertain which brands are safe. Supermarket shelves have been swept bare from product recalls. Shops in Hong Kong have reported a rush for imported formula from cross-border shoppers, and some retailers are reportedly rationing their stocks. Mainlanders have also been rushing to import milk powder from Kinmen. Wet nurses are enjoying a resurgence in popularity in major cities. New Zealand media reported Chinese sailors and expatriates have been buying local dairy produce for sending back to relatives in China.

Chinese government

Public relations

After the AQSIQ published its tests on 491 batches of baby milk powder produced by all the 109 companies on 16 September 2008, the country's State Council attempted to reassure that formula produced by most companies in China was safe. Although 69 batches from 22 companies were found to be melamine-contaminated, it said: "the number of companies with melamine-tainted milk accounted for 20.18% of the total of milk powder companies in China. And the number of tainted batches accounted for 14.05% of the total batches tested." After publishing results of further tests on 30 September, where 265 batches produced by 154 companies, the AQSIQ once again reiterated that the majority of the country's production was safe - only 18% of samples had tested positive for melamine: "of the 290 dairies nationwide 154 dairies, representing 87% market share, 134 of these dairies had tested negative for melamine."

Censorship

Behind the scenes, mainland media was ordered to tone down coverage of the unfolding scandal to prevent unrest. News editors were ordered to adhere to the official copy of Xinhua. Traditionally, media knows to avoid negative news coverage, and CCTV shifted reporting emphasis on the forthcoming launch of Shenzhou VII. The announcement of the AQSIQ test results was relegated to the final item on the CCTV evening news.

The Wall Street Journal reported that the suppression of bad news had not improved since the scandal was uncovered: media rigidly adheres to the official line, as ordered; Chinese consumers were ill-informed about the extent of global recalls. It reported local journalists saying that discussion of the causes of the crisis, government responsibility, questions about government complicity with dairy companies, was strictly off limits.

Pressure on the legal profession

A group of 90 lawyers from Hebei, Henan and Shandong - the three worst affected provinces - had made pro bono offers to assist victims, and a list of their names was published. Organisers of the group declared that they had come under pressure from officials to not to get involved in the issue. The Beijing Lawyers' Association, a part of the Communist Party apparatus, asked its members "to put faith in the party and government". Other members of the group have reportedly received less subtle requests. Authorities are said to fear social unrest if law suits were unleashed. Pro-Beijing Hong Kong journal Ta Kung Pao reported that central authorities, fearful of the effect of mass law suits, held a meeting with lawyers' groups on 14 September, asking them to "act together, and help maintain stability" 「服從大局，保持穩定」

Chang Boyang, one of the group of volunteer lawyers, said he had filed a suit in Guangdong against Sanlu on behalf of the parents of one victim. One was already filed in Henan. Chang said that Henan's justice department had ordered 14 Henan lawyers to stop helping the kidney stone victims, saying it had become a political issue. He claims he was told by the official to "follow the arrangements set out by the government", and was further threatened: "If this suggestion is disobeyed, the lawyer and the firm will be dealt with."

On 11 October 2008 Ministry of Health's deputy minister Liu Qian stated on a press conference, all the foreign companies' application for compensation of dairy products recall will be dealt with on the basic of commerce,and government will use diplomatic channels to help oversea countries if they encounter problems.

Top leaders' actions

AQSIQ announced the revocation of all exemptions from inspection previously granted to dairy producers, who were asked to cease citing the privilege in their advertisements. The State Council ordered an overhaul of the dairy industry, and promised to provide free medical care to those affected. Formally, the State Council released its initial findings, and a top-level official apology of the incident both came on 21 September. Wen Jiabao apologised while visiting victims in hospitals.

This incident made me feel sad, though many Chinese have been understanding. It disclosed many problems for government and company supervision of the milk sources, quality and marketing administration... The government will put more efforts into food security, taking the incident as a warning. What we are trying to do is to ensure no such event happens in future by punishing those leaders as well as enterprises responsible. None of those companies without professional ethics or social morals will be let off.

— Wen Jiabao, China's Premier (21 September 2008)

In what is believed to be his first ever mention of the contamination incident, President Hu Jintao said on 1 October 2008 :"Food safety is directly linked to the well-being of the broad masses and the competence of a company... Chinese companies should learn from the lessons of the Sanlu tainted milk powder incident."

On 6 October, putting the blame on "illegal production and greed", the country's "chaotic dairy production and distribution order", and the "gravely absent supervision" for the crisis, the State Council announced new dairy industry regulations.

Denial of existence of CGOSFSC

The speech by Zhu Yonglan of the CGOSFSC which was widely circulated by citizens on the internet stoked criticism of leaders' double standards for insulating themselves from the food-security issues faced by the general population. On 26 September, Xinhua issued a brief statement, in Chinese, denying the existence of the Centre, the award, or any person named Zhu Yonglan, saying these were "purely rumours".

Stepped-up inspection program

According to a senior quality inspectorate official, the government aimed to establish nearly 400 product testing centres within the next two years, and 80 of these would be food testing centres. Working groups were established in nearly every single province in order to set up new food testing centres and replace outdated equipment.

On 24 September 2008, China's newly appointed AQSIQ chief Wang Yong said that the government would "carry out 'forceful' measures to deal with the chemical contamination"; it's inspectors had removed 7,000 tonnes of melamine contaminated dairy products from shops all over China.

On 4 October 2008, the Ministry of Agriculture announced it had drawn up an emergency rescue plan with the Ministry of Finance to give special subsidies to dairy farmers, seriously affected by the lack of demand following the contamination scandal; local governments had already drafted policies to stabilise the dairy industry; 150,000 officials had been sent to overhaul the entire supply chains from cattle feed to milk-collection; 18,803 milk-collecting stations had been registered and checked by these officials. The ministry was reported to have investigated 98 dairy producers and farms, banned 151 illegal companies and indicted three manufacturers for feed containing melamine. During an investigation into melamine contamination at Yili and Mengniu in Hohhot, police arrested six more people for allegedly selling and mixing melamine into raw milk. The AQSIQ announced on 5 October that all tests showed all milk produced after 14 Sept were free from contamination.

The Ministry of Health and five other government agencies issued a joint statement on 9 October 2008, setting the legally acceptable level of melamine content in infant formula at 1 ppm (1 mg/kg), and at 2.5ppm in other dairy products (including milk). The Chinese Centre for Disease Control and Prevention said that any amount exceeding 1 ppm would give reason to suspect its presence was intentional."

Other third parties

Joseph Sternberg of the Wall Street Journal said that Beijing's failures of food-safety act are "much more pernicious, and disgraceful, than at first it appears... [not only has this] milk poisoned thousands of infants with melamine, it also poisons the society at large with fear."

Hu Xingdou (胡星斗), a professor at Beijing Institute of Technology, said: "There hasn't been an effort to establish a moral foundation to the market economy, and this incident is the inevitable result." Hu urged the leadership to transform the way of thinking, to repair the system, rather than merely concentrating on individual problems as they arise. An op-ed in the New York Times compared this to the "swill milk scandal" in New York in the 1850s in which 8,000 children reportedly died from milk from cows fed swill which was then whitened with plaster of Paris, thickened with starch, eggs and hued with molasses. The underlying regulatory vacuum in the fast-growing economy was identified as the problem. "In such get-rich-quick societies, there is a huge temptation to tamper with food, particularly when margins are low. The rewards are instant."

The dairy scandal raises the core question of whether the ruling Communist Party is capable of creating a transparent, accountable regulatory structure within a one-party system. Time Magazine cited many analysts saying the party’s need to maintain control of the economy and of information undermines the independence of any regulatory system. A Beijing-based consultancy, Dragonomics, concurred that "the problem was rooted in the Communist Party’s continued involvement in pricing control, company management and the flow of information". Independent regulation was lacking or ineffective as local industries' were so intertwined with local officialdom.

The Times noted the dichotomy that state media have admitted that while one child in 20 in Shanghai may have kidney damage as a result of drinking contaminated formula milk, on the other hand, "like the emperors of old, the new communist elite enjoy the finest produce from all over China, sourced by a high-security government department."

Lawyer Bill Marler, speaking at a food safety conference in Beijing, said that this food scare has harmed the "made in China" brand abroad. He remarked: "If this product had gotten into the United States, it would have been 'game over' for a lot of products in China." Access Asia, a Shanghai-based consumer consultancy, said Fonterra was a classic example of western executives in China "believ[ing] advice in business books that they must avoid making their local partners 'lose face' at all costs." It suggested that Fonterra paid a heavy price in write-offs, a wrecked business and public condemnation.

David Bandurski, journalist and researcher at China Media Project , criticised the crippling media controls by the state combined with "runaway commercial greed", and said that the censorship "suppresses information.. critical to the well-being of ordinary Chinese." He asserted that increased press freedom needs to be a component of any strategy to deal with this and other future food-security lapses in China. Free media in China could compensate for the underdeveloped rule of law, and be important in keeping companies and regulators honest. Bandurski cited a warnings in the 9 October 2008 issues of Nanfang Daily and the Information Times for consumers to be aware of that problematic dairy stock (that produced before 14 September) have reappeared in some stores under guise of aggressive promotions.

Caijing said the crisis revealed that that there had been a "serious dereliction of duty" at the AQSIQ, and that the government had failed as a "night watchman". Citing public consensus that government should limit itself to a supervisory role, it urged the construction of a regulatory system which addressed the role of regulators watching over the production process, avoiding over-regulation, 'regulatory capture' and abuse of power by regulators. "Keeping the market in order and ensuring independent law enforcement should be part of the mandate."

On 10 October 2008 Austin Ramzy, of China Blog Time.com, posts an essay written by Jessie Jiang: China is a "society where morals often bend for the buck". After the Health Ministry official Wang Xuening's announcement of the maximum allowed levels of melamine in milk products, the Chinese government were furthermore embarrassed by "anonymous blog posts grew even more critical". Consumers believe dairy producers will "took the standards as a green light for further adulteration",and citizens accuse the Chinese government's conduct of "putting profits ahead of people's health".
Jessie Jiang further questioned the Chinese goverment:"why didn't it do this sooner" as it is becoming known that before 11 September 2008 the Ministry of Health "didn't even have a standard for melamine", yet Jiang praises the communist officials for not "resorted to coercing other jurisdictions".Jiang suggests to the Chinese officials:"it takes more than just a hindsight regulation, or an apologetic, grandfatherly prime minister", if they would like to see the return of consumers' confidence on milk products.

See also

• 2008 Chinese milk scandal/Official test faliures
• 2007 Chinese export recalls
• 2007 pet food recalls
• Chinese protein export contamination
• Toxic cough syrup

Notes

For verification purposes, the following are relevant citations in Chinese from the Nanfang daily article dated 9 October 2008