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China orders Nestle to withdraw milk powder over iodine

Nestle SA, the world's biggest food maker, said it had been told to withdraw one of its milk powder products from sale in eastern China after government tests showed it contained an excessive amount of iodine.

The Zhejiang Province branch of the State Administration of Industry and Commerce found the level of iodine in the product exceeded the national limit, Nestle said in a statement e-mailed to Bloomberg News.

The iodine level conforms to international standards and is safe, the company said in the statement.

"Nestle has already withdrawn the product in Zhejiang Province, and may have to do so in other parts of China," said Lu Xiao, spokeswoman for Nestle at China Global Public Relations Co in Beijing.

"We cannot estimate now the extent of loss Nestle would incur because of this, as the problem seems to be spreading," she said.

Carrefour SA, the Paris-based supermarket operator, told stores nationwide to pull the product from its shelves, the Oriental Morning Post reported today, citing an unidentified spokesman for the French retailer.

"We did sample examinations on Nestle's products in the province and discovered the problems," said Shen Yan, spokeswoman of the commerce regulator in Zhejiang Province.

"It's hard to say at the moment whether the same problems exist in other areas," she said.

Excessive iodine is found in "Nestle Growth Milk Powder Growth 3+," a product for babies older than one year and produced in China's northeastern Heilongjiang Province, Lu said. Iodine deficiency and excessive intake can both cause health problems.

Nestle, after thorough examination on production and processing procedures, found that the milk powder was disqualified by unstable iodine levels in fresh milk used to make powder, according to the statement.

"We are paying close attention to the iodine incident and will fully cooperate with the Chinese government," Vevey, Switzerland-based Nestle said.

China's government in March ordered Yum! Brands Inc's KFC restaurant chains to suspend the sale of several products after finding they contained Sudan 1, a dye that's been linked to cancer.
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