Tue, Oct 14, 2008 - Page 5 News List

Chinese dairy says it was victimized

AP , BEIJING

A dairy company ensnared in China’s chemical-tainting scandal said it was a victim of unscrupulous subcontractors who provided raw milk.

Speaking on a television talk show late on Sunday, the president of Bright Dairy said his company had been “too nice” toward milk collection stations that bought milk from farmers.

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

“We thought they were operating in good conscience,” Guo Benheng (郭本恆) 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 yesterday.

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 (趙遠華) said.

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

In a sign of the scandal’s rising financial toll, newspapers yesterday 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 tonnes of melamine-spiked protein powder. Eight dairy farm owners and milk buyers were also arrested for purchasing the powder.

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

The latest tests on 172 batches of milk powder from 55 different brands showed them to be safe for melamine content, according to the General Administration of Quality Supervision, Inspection and Quarantine, the government’s chief food quality inspector said yesterday.

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