FTec 165 Food Safety

1. In 2008, a case of fraud occurred in China. It was found out that infant milk powder had
been contaminated with melamine. An estimated 300,000 babies got ill and resulted in 6
fatalities due to kidney damage. Search for the details of this incident on the internet and
take note of the violation that the processing company had done. Obtain the following
information when you will do the research:
a. Name of the company identified as the culprit of the scandal.
b. Summary of the incident that happened.
c. Description of the contaminant (melamine) added into the milk formulation and reason
why it is caused such a big problem in the industry.
d. Governments’ action on this food scandal. Is there new legislation or policy that was
issued relevant to this issue and to make sure that such fraud will not happen again.
2. Aside from the information that you need to provide, as mentioned above, write your own
point of view on this incident.

The 2008 Milk Scandal Revisited

Six years ago today, sixteen infants in China’s Gansu Province were diagnosed
with kidney stones. All of them had been fed milk powder that was later found
to have been adulterated with a toxic industrial compound called melamine.
Four months later, an estimated 300,000 babies in China were sick from the
contaminated milk, and the kidney damage led to six fatalities. The Sanlu
Group, one of the largest dairy producers in China, was identified as the chief
culprit. But as the scandal unfolded, more Chinese dairy firms became
implicated.

The incident not only damaged the reputation of China’s food exports, but also
dealt a devastating blow to the booming domestic dairy industry, leading to a
series of mergers and consolidations. The inelastic baby formula market
boosted the demand for foreign products—indeed, after 2009, more than 100
foreign brands flooded into the Chinese market. In hindsight, it is not an
overstatement that the 2008 incident is one of the largest food safety scandals
in PRC history.

The scandal lays bare China’s failure to build an effective regulatory state in its
transition to a market economy. Drawing lessons from the crisis, the
government sought to strengthen its regulatory capacity in food safety control.
In June 2009, China promulgated the Food Safety Law, which prohibits any
use of unauthorized food additives. The law also led to the establishment of a
high-profile central commission to improve inter-state coordination and
enforcement of food safety regulation at the national level. In March 2013,
China Food and Drug Administration (CFDA) was set up as a ministry-level
agency to consolidate authorities in food and drug safety.

These measures, while important and necessary, have not led to significant
improvement in China’s food safety. At the State Council Food Safety
Commission meeting in January 2013, Premier Li admitted that while food
safety has improved, “there are still a great deal of outstanding problems and
potential hidden dangers; the situation remains grim.” China’s efforts to
address food safety are complicated by new environmental health hazards,
such as pollution of  water and soil. Rice and garden vegetables contaminated
by heavy metals poses major health risks, but the cleanup is highly costly and
may take decades. Consumer confidence in Chinese dairy products remains
extremely weak. Official media suggests that over half of the Chinese baby
formula market is dominated by foreign brands, and in some cities, the share
is as high as 80 percent. In a desperate and bizarre move to beef up the
domestic dairy industry, China issued a new regulation that banned the
import of dairy products from unregistered overseas manufacturers.

In recognition of the challenges, the government leaders over the past months
have upped the ante for food safety. In March, Premier Li Keqiang used the
melamine scandal to argue for “the strictest possible oversight and
accountability” and “toughest possible punishment” in safeguarding food
safety. Under Li’s blessings, China last week unveiled the draft amendment to
the 2009 Food Safety Law. Dubbed “the strictest food safety law in history,”
the new version has raised the bar of food safety management and provided
more explicit requirements for government agencies to follow in the food
supply chain.

But how effective these efforts remains to be seen. Since the regulation of food
safety incorporates several mutually reinforcing activities (production,
marketing and consumption) and involves various stakeholders (e.g.,
manufacturers, traders, consumers, governmental actors), it is highly unlikely
that pure top-down, state-centric  regulatory and legal frameworks will be
sufficient to defuse China’s food safety crisis. In order to achieve robust and
sustainable regulatory capacity, the government should invest in the building
of a vigorous civil society and a free and socially responsible media, which
would serve as sources of information and discipline in enforcing food safety
laws and regulations.  It should be committed to the building of an
independent court system to protect the food safety legal framework from
being hijacked by self-serving bureaucrats or other vested interests.  It should
also be serious about establishing a code of business ethics at corporate and
individual level to keep the “capitalism without ethics” in check.  Such
institutional support, as a demonstrated in my recent book, will enable China
to build its regulatory state from more solid ground

2008 Chinese milk scandal

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Empty milk shelf in a Carrefour store in China as a result of the scandal

The 2008 Chinese milk scandal was a significant food safety incident in China. The

scandal involved milk and infant formula along with other food materials and
components being adulterated with melamine. The chemical was used to increase
the nitrogen content of diluted milk, giving it the appearance of higher protein content in
order to pass quality control testing. Of an estimated 300,000 victims, [1] 6 babies died
from kidney stones and other kidney damage and an estimated 54,000 babies were
hospitalized.[2][3]
The scandal was first exposed on 16 July, after sixteen babies in Gansu Province were
diagnosed with kidney stones.[cm 1] The babies were fed infant formula produced by
the Shijiazhuang-based Sanlu Group, then one of the leading producers of infant
formula in the country. After the initial focus on Sanlu, further government inspections
revealed that products from 21 other companies were also tainted, including those
from Arla Foods–Mengniu, Yili, and Yashili.[4]
The issue raised concerns about food safety and political corruption in China and
damaged the reputation of the country's food exports. The World Health
Organization called the incident "deplorable" and at least 11 foreign countries halted all
imports of Chinese dairy products. A number of drumhead trials were conducted by the
Chinese government resulting in two executions, three sentences of life imprisonment,
two 15-year prison sentences,[5] and the firing or forced resignation of seven local
government officials and the Director of the Administration of Quality Supervision,
Inspection and Quarantine (AQSIQ).[6]
In late October 2008, similar adulteration with melamine was discovered in eggs and
possibly other food. The source was traced to melamine being added to animal feed,
despite a ban imposed in June 2007 following the scandal over pet food ingredients
exported to the United States.[7]

Melamine[edit]
Main article: Melamine

Melamine is used to manufacture melamine-formaldehyde resin, a type of plastic known for its

flame-retardant properties and commonly employed in countertops, dry-erase boards, etc. Melamine
itself is nitrogen-rich and is sometimes illegally added to food products to increase their apparent
protein content. It has also been employed as a non-protein nitrogen, appearing in soy meal, corn
gluten meal and cottonseed meal used in cattle feed. [8] Melamine is known to cause kidney
failure and kidney stones in humans and animals when it reacts with cyanuric acid inside the body.
The use of melamine in food production is not approved by WHO or national authorities. [9]
The Kjeldahl and Dumas methods used to test for protein levels fail to distinguish between nitrogen
in melamine and naturally occurring in amino acids, allowing the protein levels to be falsified.
Introduced into milk, it can help conceal fraudulent dilution with water. [10] Melamine adulteration of
food products also made headlines when pet food was recalled in Europe and the U.S. in 2007.

Source of contamination[edit]
The World Health Organization (WHO) said melamine may be found "in a variety of milk and milk
products at varying levels, from low ppb to ppm ranges".[11] One academic suggested cyromazine, a
melamine derivative pesticide commonly used in China for a long time, is absorbed into plants as
melamine; it may therefore have long been present in products such as poultry, eggs, fish, and dairy
products.[12][13] 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.[14]
Because of poor animal husbandry, production and storage and the demand for milk far outstripping
supplies, the use of other potentially harmful chemical additives such as preservatives and hydrogen
peroxide has been reported by independent media as being commonplace. 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.[15]
[16]
 However, the procurement chain is also implicated, as milk agents are often politically well-
connected.[15] Farmers report salespeople had, for years, been visiting farms in dairy areas hawking
"protein powder" additives, which would often be delivered in unmarked brown paper bags of 25
kilograms (55 lb) each. Thus, farmers either added melamine contaminant unwittingly, or turned a
blind eye to milk adulteration to ensure their milk was not rejected. [16] The big dairy producers were
complicit in producing "test-tube milk". [15]
Caijing reported in 2008 that "spiking fresh milk with additives such as melamine" was no longer a
secret to Hebei dairy farmers for the past two years. Because of fierce competition for supplies, and
the higher prices paid by Mengniu and Yili, Sanlu's procurement became squeezed; its inspection
system became compromised "as early as 2005 and allowed milk collection stations to adopt
unscrupulous business practices", while government supervision was "practically nonexistent". [17]
Caijing also reported the melamine in the tainted milk may have come from scrap melamine costing
¥700 per tonne—less than one-tenth of the price of 99% pure industrial grade melamine. The
melamine production process produces pure melamine by crystallisation; the melamine remaining in
the mother liquor is impure (70%) and unusable for plastics, so it is scrapped. It said Sanlu's baby
formula melamine content was a result of tampering by adding low-cost vegetable protein (such as
low-grade soya powder), and large amounts of scrap melamine as filler. [cj 1][18] Scrap melamine
contains impurities such as cyanuric acid that form more insoluble crystals (melamine cyanurate)
than melamine alone, aggravating the problem. [citation needed]

Victims[edit]
On 17 September 2008, Health Minister Chen Zhu stated tainted milk formula had "sickened more
than 6,200 children, and that more than 1,300 others, mostly newborns, remain hospitalized with 158
suffering from acute kidney failure". [19] By 23 September, about 54,000 children were reported to be
sick and four had died.[20] An additional 10,000 cases were reported from the provinces by 27
September. A World Health Organization official said 82% of the children made ill were 2 years of
age or below.[21] The Hong Kong Centre for Food Safety said that 99 percent of the victims were
aged under 3 years.[22] Ten Hong Kong children were diagnosed with kidney problems, [23] at least four
cases were detected in Macau,[24] and six in Taiwan.[25] Non-human casualties included a lion cub and
two baby orangutans which had been fed Sanlu infant formula at Hangzhou Zoo. [26]
The government said on 8 October it would no longer issue updated figures "because it is not an
infectious disease, so it's not absolutely necessary for us to announce it to the public". [27] 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.[28]
In late October, the government announced health officials had surveyed 300,000 Beijing families
with children less than 3 years old. It disclosed approximately 74,000 families had a child who had
been fed melamine-tainted milk, but did not reveal how many of those children had fallen ill as a
result.[29]
Because of the many months before the scandal was exposed, the media suggest the official figures
are likely to be understated. Kidney stones in infants started being reported in several parts of China
in the past two years. A number of yet-to-be-officially-acknowledged cases were reported by the
media. However, those deaths without an official verdict may be denied compensation. [30] On 1
December, Xinhua reported that the Ministry of Health revised the number of victims to more than
290,000 with 51,900 hospitalized; authorities acknowledged receiving reports of 11 suspected
deaths from melamine contaminated powdered milk from provinces, but officially confirmed three
deaths.[31]
On characterisation and treatment of urinary stones in affected infants, the New England Journal of
Medicine printed an editorial in March 2009, along with reports on cases from Beijing, Hong Kong
and Taipei.[32]
Urinary calculi specimens were collected from 15 cases treated in Beijing and were analysed as
unknown objects for their components at Beijing Institute of Microchemistry using infrared
spectroscopy, nuclear magnetic resonance, and high-performance liquid chromatography. The result
of the analyses showed the calculi were composed of melamine and uric acid, and the molecular
ratio of uric acid to melamine was around 2:1.[33]
In a study published in 2010, researchers from Peking University studying ultrasound images of
infants who fell ill in the 2008 contamination found while most children in a rural Chinese area
recovered, 12 percent still showed kidney abnormalities six months later. "The potential for long-term
complications after exposure to melamine remains a serious concern", the report said. "Our results
suggest a need for further follow-up of affected children to evaluate the possible long-term impact on
health, including renal function." [34]
Companies[edit]
Contaminated products found in the China AQSIS tests include baby formula products produced by
the following companies, in order of highest concentration found. Shijiazhuang Sanlu Group,
Shanghai Panda Dairy, Qingdao Shengyuan Dairy, Shanxi Gu Cheng Dairy, Jiangxi Guangming
Yingxiong Dairy, Baoji Huimin Dairy, Inner Mongolia Mengniu Dairy, Torador Dairy Industry (Tianjin),
Guangdong Yashili Group, Hunan Peiyi Dairy, Heilongjiang Qilin Dairy, Shanxi Yashili Dairy,
Shenzhen Jinbishi Milk, Scient (Guangzhou) Infant Nutrition, Guangzhou Jinding Dairy Products
Factory, Inner Mongolia Yili Industrial Group, Yantai Ausmeadow Nutriment, Qingdao Suncare
Nutritional Technology, Xi'an Baiyue Dairy, Yantai Leilei Dairy, Shanghai Baoanli Dairy, and Fuding
Chenguan Dairy.[35]

Sanlu[edit]
The scandal began with revelations of contamination of Sanlu milk products. The New Zealand dairy
cooperative Fonterra, which owned a 43% stake in Sanlu, said they were alerted to melamine
contamination on 2 August (almost a month before the issue became public), and have said 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. [36] A Fonterra director had given Sanlu management a
document detailing the European Union's permitted levels of melamine, but Fonterra chief executive
Andrew Ferrier has stated that at no time did Fonterra say small amounts of melamine were
acceptable.[37]
Warning signs ignored[edit]
From 2005 to 2006, an agent, Jiang Weisuo, from Shaanxi Jinqiao Dairy Company in northwest
China reportedly publicly discussed his fears about unauthorised substances being added to
competitors' milk.[38] His complaints to regulators and dairy makers in 2005 and 2006 never yielded
any result; his story was picked up by China Central Television, who ran a report complete with
footage of adulteration in progress, yet the Shaanxi Quality and Technical Supervision Bureau said
they failed to find evidence of wrongdoing.[16]
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 [39][40] 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.[39][41]
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 powdered milk and complained
to the AQSIQ. Gansu Province sent a report to the Ministry of Health 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.[17]
Cover-up allegations[edit]
Fonterra notified the New Zealand government on 5 September and three days later, the Prime
Minister Helen Clark had Beijing officials alerted directly.[36][42] News reports began circulating in China
on 9 September,[43] the news broke internationally a day later by Reuters.[44] 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.[45] Sanlu initially denied the allegations.[citation needed]
A State Council investigation revealed Sanlu began receiving complaints about sick infants as far
back as December 2007, but did no tests until June 2008. It said leading government officials in
Shijiazhuang city 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. [46] 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".[47]
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. The agency reportedly had repeatedly contacted key account staff
at Baidu and proposed a ¥3 million (US$440,000) budget to screen all negative news. [48][49] After the
memo began circulating on the internet, Baidu denounced, in a communiqué on 13 September 2008,
the approaches by said agency on several occasions, saying the proposal was firmly rejected, as it
violated their corporate principles of unbiased and transparent reporting. [49]
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."[50] Western media speculated China's desire for a
perfect summer Olympics contributed to the delayed recall of the baby milk, citing a guideline
allegedly issued to Chinese media that reporting food safety issues, such as cancer-causing mineral
water, was "off-limits"[50][51][52] although the Central government denied issuing this guidance. [36] Hebei
provincial vice-governor said his administration was only notified by Shijiazhuang on 8 September.
[53]
 However, a journalist at Southern Weekend wrote an investigative report in late July for
publication about infants who had fallen ill after consuming baby formula from Sanlu. Six weeks
later, senior editor Fu Jianfeng revealed on his personal blog that this report had been suppressed
by authorities, because of the imminent Beijing Olympics.[54] 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.[54]
Sanctions[edit]
On 15 September, the company issued a public apology for the contaminated powdered milk;
[55]
 Sanlu was ordered to halt production, and to destroy all unsold and recalled products. Authorities
reportedly seized 2,176 tons of powdered milk in Sanlu's warehouses. An estimated 9,000 tons of
product had been recalled.[56]
Tian Wenhua, Chairwoman 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;[57] four Shijiazhuang officials, including vice mayor
in charge of food and agriculture, Zhang Fawang, were reportedly removed from office.
[58]
 Shijiazhuang Mayor Ji Chuntang resigned on 17 September. [59] Li Changjiang, minister in charge of
the AQSIQ, was forced to resign on 22 September after the State Council inquest concluded he was
responsible for the "negligence in supervision". Investigators also blamed the Shijiazhuang
government.[60] Local Party Secretary Wu Xianguo was fired on the same day.[61]
Arrests[edit]
Sanlu general manager Tian Wenhua was charged under Articles 144 and 150 of the criminal code.
[62]
 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. Three hundred kg of suspicious chemicals, including 223 kg of melamine,
were confiscated.[63] 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; [64] the owner of
another collection centre which resold seven tons of milk a day to Sanlu, was arrested, and his
operation was shut down.[14]
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.
He and eight other traders, dairy farm owners and milk purchasers who bought the powder from him
were arrested in early October, bringing the total to 36. [65]
During the week of 22 December 2008, 17 people involved in producing, selling, buying and adding
melamine in raw milk went on trial. Tian Wenhua, former Sanlu general manager, and three other
company executives appeared in court in Shijiazhuang, charged with producing and selling milk
contaminated with melamine. According to Xinhua, Tian pleaded guilty, and told the court she
learned about the tainted milk complaints from consumers in mid-May. She then apparently headed
a working team to handle the case, but did not report to the Shijiazhuang city government until 2
August.[66]
The Intermediate People's Court in Shijiazhuang sentenced Zhang Yujun and Geng Jinping to death,
and Tian Wenhua to life in prison, on 22 January 2009. [67] Zhang was convicted for producing 800
tons of the contaminated powder, Geng for producing and selling toxic food. Geng Jinping managed
a milk production center which supplied milk to Sanlu Group and other dairies. [68] The China
Daily reported Geng had knelt on the courtroom floor and begged the victim's families for
forgiveness during the trial. The court also sentenced Sanlu deputy general managers Wang Yuliang
and Hang Zhiqi to fifteen years and eight years in jail, respectively, and former manager Wu
Jusheng to five years.[69] Several defendants have appealed. [70]
Zhang Yujun and Geng Jinping were executed on 24 November 2009. [71]
Effect on the company and bankruptcy[edit]
The value of the company plunged as a result of the scandal. [72] On 24 September, Fonterra
announced 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 because of the "criminal
contamination of milk".[73] By 27 September, China Daily reported Sanlu was close to bankruptcy, and
might be taken over by the Beijing Sanyuan Foods Company.[74] The company is also facing lawsuits
from parents (see Anger at Sanlu).
The Beijing Review said Sanlu expects to have to pay compensation claims totaling ¥700 million,
and it became clear the company would be broken up and sold. [75]
On 25 December, Shijiazhuang court accepted a creditor's bankruptcy petition against Sanlu. Media
commentators expected the Sanlu distribution network to be sold. [76]

Chinese majors[edit]
On 16 September, the AQSIQ released test of samples from 491 batches of products sold by all 109
companies producing baby formula. It said all 11 samples from Sanlu failed the melamine test. [4]
[58]
 Sanlu, whose products sell at half the price of equivalents on the market, [77] recorded the highest
levels of contamination among all the samples tested, at 2,563 mg/kg or parts per million ("ppm").
Tainted samples were found among 21 other suppliers, where concentrations ranged from 0.09 to
619.00 ppm.[4][78]
There was melamine contamination in 10% of liquid milk samples from Mengniu and Yili, and 6% of
those from Bright Dairy.[79] On discovery of contamination, the three major producers were all
stripped of their status as 'Chinese national brands'. [80] Yili, Mengniu and Bright Dairy & Food
Co. recalled tainted powdered milk and apologised in separate statements. [77] Mengniu recalled all its
baby formula, and trading in its shares on the Hong Kong Stock Exchange was suspended on 17
September.[81] Shares in other dairy companies fell strongly the next day. [82] 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.[83]
On 30 September, the AQSIQ announced test results of a further 265 batches of powdered milk
produced by 154 different companies prior to 14 September, where it found 31 batches produced by
20 domestic dairy companies were tainted with melamine. [84]
On 1 December, China's Ministry of Health issued an update, saying nearly 300,000 babies were
sickened after consuming melamine-contaminated infant formula. In response to the surge of
contaminated Chinese products, the United States Food and Drug Administration opened its first
overseas inspection offices in November 2008, with bureaus in Shanghai, Beijing and Guangzhou. [85]

Trade and industry impact[edit]

Chinese industry[edit]
The State Council ordered the testing of product of all dairy producers, and to this end, some 5,000
inspectors were dispatched. The Chinese market has grown at an average annual rate of 23% since
2000. In 2006, milk production reached 30 million tons, ten times the volume of a decade before. [86] It
was valued at some ¥122 billion (US$18 billion) in 2007, and consumers had severely lost
confidence in the industry.[87]
The events have exposed the often-incestuous relationship between local business and local
government. In addition to the tax revenues to local authorities—Sanlu contributed ¥330 million in
2007, many companies invite local officials to become "silent partners" in their corporations—in
return for "protection" at the political level; former Sanlu chairman Tian Wenhua was made honorary
deputy to the Provincial People's Congress.[88] The scandal has also highlighted structural problems
of inadequate production volume, inherent quality issues, and poor production methods. The Inner
Mongolia region produces over one-fourth of China's milk,[89] 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.[90] 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.[89]

POS materials from Yili Dairy declaring clean bill of health from AQSIQ

Consumer panic resulting from the contaminated milk lessened demand for dairy products, causing
hardship to more than 2 million Chinese farmers who had nowhere to sell their milk and no means
by which to support their dairy cows. Farmers reportedly poured away milk and faced selling cows to
a buyerless market.[91]
Since the scandal erupted, sales have fallen by 30–40% on a comparative basis, according to the
Chinese Dairy Association. The Association estimates the financial effect of the order of ¥20 billion,
and forecasts that confidence may take up to two years to be fully restored. [nF 1] In an effort to prop up
sales and retain their market share, dairy firms have cancelled their common accord not to
use promotions 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.[nF 2]

Foreign operations in China[edit]

Mengniu-Arla, joint-venture between Danish/Swedish co-operative Arla Foods and Mengniu[92]
[93]
 halted production on 16 September 2008 after three of 28 tests taken from Mengniu showed
traces of melamine; the contaminated batches had been recalled. [94]
Mengniu, milk supplier to Starbucks, was replaced by Vitasoy when the coffee retailer eschewed
milk in favour of soya milk in its China operations. KFC also suspended selling Mengniu milk. [95]
Tokyo-headquartered Lotte Group, a major snacks maker, recalled its 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" to preserve customer confidence. [96] The range was also ordered off
Dutch[97] and Slovakian shelves.[98] Its Chocolate Pie was seized when samples tested positive in
Malta.[99]
On 29 September, British confectionery group Cadbury was forced to withdraw its 11 chocolate
products in China on suspicion of melamine contamination, in turn causing it to close down its three
factories in China. The recall affected the China markets, as well as Taiwan, Hong Kong, Japan,
Korea and Australia.[100] Tests in Hong Kong found excessive amounts of melamine in China-
made Dairy Milk products.[101]
On 30 September, Unilever recalled its Lipton milk tea powder after the company's internal checks
found traces of melamine in the Chinese powdered milk used as an ingredient. [102][103] Heinz recalled
cases of baby cereal in Hong Kong after discovering they contained melamine. [104][105] Nestlé's factory
in Heilongjiang was also implicated: the Taiwanese Department of Health forced the delisting of
six Neslac and KLIM products on 2 October for containing minute traces of melamine, although the
minister said they did not pose a significant health risk. [106]
Since the milk crisis broke, Nestlé says it has sent 20 specialists from Switzerland to five of its
Chinese plants to strengthen chemical testing. On 31 October, it announced the opening of a $10.2
million Beijing research and development centre, to "serve as the base and the reference in food
safety for Nestlé in Greater China". Nestlé Chief Technology Officer said the centre was equipped
with "highly sophisticated analytical tools for detecting trace amounts of residues and undesirable
compounds like melamine or veterinary drugs or natural toxins". [107]

Olympics[edit]
There were concerns dairy products consumed during the 2008 Summer Olympics 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."[108]

Outside mainland China[edit]

PRC Customs said exports of dairy products and eggs in 2007 were valued at US$359 million, a
year-on-year increase of 90 percent. Since the news of the melamine contamination began to
circulate, at least 25 countries stopped importing Chinese dairy products. A number of countries had
imposed blanket bans on Chinese milk products or its derivatives—among which were Bangladesh,
Bhutan, Brunei, Burundi, Cameroon, Chile, Colombia, Dominican Republic, Gabon, India, Côte
d'Ivoire, Maldives, Mali, Mexico, Nepal, Papua New Guinea, Paraguay, South Korea, Suriname,
Tanzania, Togo, and the United Arab Emirates [109][110][111][112][113] —joining Indonesia, Taiwan, Japan,
Singapore and Malaysia which had also imposed specific bans on Chinese dairy products which
tested positive for melamine.[114][115]
Hong Kong[edit]
The scandal led to an erosion of trust in locally produced infant formula and from then on, many
Shenzhen residents and parallel traders travelled across the border to purchase powdered milk from
Hong Kong shops.[116] Lower confidence in Chinese production, combined with the relaxation of visa
requirements for mainland citizens, had resulted in shortages of infant formula in Hong Kong for an
extended time.[117] Because of a great public outcry, the Import and Export (General) (Amendment)
Regulation 2013 was passed in Hong Kong, prohibiting the unlicensed export of powdered formula,
including milk and soya milk powder for infants and children under 36 months. [118] According to the
HK government, the regulation is not applicable to "powdered formula that is exported in the
accompanied personal baggage of a person aged 16 or above leaving Hong Kong if the person did
not leave Hong Kong in the last 24 hours and the formula does not exceed 1.8 kg in total net
weight".[119]
Although the Hong Kong government imposed a strict 2-can limit on the export of infant formula in
March 2013,[120] spurred price differentials caused by sales tax on the mainland and lax customs,
trafficking activity including for powdered milk has continued, exacerbating the Hong Kong-Mainland
conflict.[121] The catchment area for traffickers spread from Fan Ling and Sheung Shui southward to
Yuen Long and Tuen Mun, causing localist groups such as Civic Passion and Hong Kong
Indigenous to take to the streets in direct action in 2015.[122]
European Union[edit]
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; [123]
[124]
 isolated contaminated products were found in the Netherlands, and the French authorities
ordered all Chinese dairy products off the shelves;[125] Tesco removed White Rabbit as a precaution
from its stores in the United Kingdom.[citation needed]
United States Food and Drug Administration[edit]
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.[126] The candy's maker and subsidiary of Bright Foods, Guan Sheng Yuan, issued a recall
to the 50 countries to which it exported. [127]
The U.S. Food and Drug Administration said while food containing melamine below 2.5 parts per
million generally 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".[128] On 12 November 2008, the FDA issued a general alert against all finished food
products from China, saying that information received from government sources in a number of
countries indicates a wide range and variety of products from a variety of producers have been
manufactured using melamine-contaminated milk was a recurring problem. [129] In late November, after
FDA found traces of melamine in one Nestle and one Mead Johnson infant product, the FDA
concluded melamine or cyanuric acid alone, "at or below 1 part per million in infant formula do not
raise public health concerns" in babies.[130]

Response[edit]
International agencies[edit]
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
children with a mean consumption of products such as milk toffee, biscuits and chocolate containing
contaminated powdered milk would not be at risk, and adults would not be at risk even in the worst-
case scenarios.[131]
The World Health Organization, which was only notified on 11 September,[132] 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.[133] WHO's representative in China, Hans Troedsson, said the issue of
who knew what and when was critical "... 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."[134]
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.[135] WHO and UNICEF also jointly decried the "particularly deplorable ... deliberate
contamination of foods intended for ... vulnerable infants and young children" [136] On 26 September,
the WHO warned health officials around the world to be alert for dairy products of Chinese origin that
could be tainted.[137] 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.[21]
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.
[138]
 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
the scale of the problem proved it was "clearly not an isolated accident, [but] a large-scale intentional
activity to deceive consumers for simple, basic, short-term profits". [138]
WHO Director-General Margaret Chan reminded Chinese mothers that babies not breastfed were
being deprived of the best nutrition offered by nature, while risking being exposed to the effects of
melamine.[139] 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". [139]

Chinese public[edit]
Weiquan lawyers

Background[show]

Lawyers and legal scholars[show]

Organizations[show]

Cases and Events[show]

 v
 t
 e
Anger at Sanlu[edit]
The case has brought anger and resentment towards milk producers and sowed uncertainty and
confusion amongst the population. Queues formed outside Sanlu's offices for refunds. The Sanlu
website was hacked several times[140] 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);[141] "Melamine" was also added as a product name
by a hacker.[142] As has been increasingly common practice, web users vented their anger on internet
bulletin boards.[55] Prevalent food scares have increased the number of online parodies circulated by
netizens.[143][144]
Before the government began offering free medical treatment, some parents had reportedly spent
small fortunes on medical care for their sick children. [145] Children who fell ill before the scandal broke
on 12 September were not entitled to free medical care offered by the State. [146] Parents of two such
victims, one from Henan and one from Guangdong, filed writs against Sanlu despite government
pressure.[147] Parents of the Henan child had claimed ¥150,000 for medical, travel and other
expenses incurred after their child developed kidney stones. [148] On 20 October, the parents of one
baby who died from contaminated milk appealed to New Zealand for justice on TV ONE. They were
quoted as saying the perpetrators of the milk scandal responsible for the death of their child
deserved to "die a thousand deaths". [149] A total of nine cases were filed against Sanlu in
Shijiazhuang.[150] Following weeks of discussions, and in the absence of a compensation plan, a
group of 15 lawyers filed a class-action lawsuit on behalf of 100 families against Sanlu, seeking
medical and other expenses as well as compensation for trauma and for death of an offspring. [151]
Anger at political leaders[edit]
Resentment increased towards the country's leaders due to the perception that they were not
troubled by the food security turmoil faced by ordinary citizens. In August 2008, Zhu Yonglan (祝詠
蘭), Director of the State Council Central Government Offices Special Food Supply Centre
(CGOSFSC),[152] disclosed in a speech that her firm had been 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.[153]
"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[152]
Premier Wen Jiabao apologised to the nation, saying he felt "extremely guilty" about the poisoned
milk products, in the same way he had previously asked the people's pardon for the deaths of coal
miners, polluted drinking water, and train passengers stranded by the authorities' inadequate
response to the severe snowstorm during the New Year.[154]
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 that the Chinese
public were told by state-controlled media that the contamination of milk was a well orchestrated
process, and they "are very sad, very frightened and very concerned". [144]
Quest for milk substitutes[edit]
Grey market and
 Informal economy

Types[show]

Legal aspects[show]

Political aspects[show]

Related subjects[show]

 v
 t
 e

Poorer consumers reliant on local infant formula, which was approximately half the price of imported
brands, had been left without alternatives to feed their children. Many had lost faith in local brands,
with others unsure of which brands were safe. Supermarket shelves had been swept bare from
product recalls.[82] Shops in Hong Kong reported a rush for imported formula from cross-border
shoppers, with some retailers reportedly rationing their stocks.[155] Some mainlanders were also
reportedly rushing to import infant formula from Kinmen.[156] Wet nurses enjoyed a resurgence in
popularity in major cities.[157][158] Some media reports have documented that Chinese sailors and
expatriates have been buying local dairy produce in Australia to send back to relatives in China. [159]
[160]
 It had been estimated in 2018 that up to 80% to 90% of infant formula purchased in Australia was
destined for China. [161]

Taiwan[edit]

Half a million participated in anti-China demonstrations in Taiwan

Main article: 1025 demonstration

The melamine food scare became a focal point against the warming relations between Taiwan's
government and the Chinese government, and a major demonstration was held by the
opposition Democratic Progressive Party on 25 October 2008 to voice dissatisfaction with Taiwan's
increasingly closer ties with Beijing, notably related to the incident. [162] Protesters fearful at
reunification blamed the Kuomintang for the melamine scare, and criticised it for failing to stand up to
China over the contamination. [163] One citizen voiced concern that President Ma Ying-jeou's promise
for closer ties with China would bring in more tainted products to Taiwan. [164] The Minister of the
Department of Health, Lin Fang-you, was heavily criticised for raising the legally acceptable limit of
melamine in food products from zero to 2.5 ppm. The public outcry subsequent to the move forced
Lin to resign.[165][166] His successor, Yeh Ching-chuan, announced a return to the original zero-
tolerance policy to melamine.[167][168]

PRC government[edit]
Top leaders' comments[edit]
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.[169] Formally, the State Council released its initial findings, [46] 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)[170]

CPC general secretary 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." [171]
On 6 October 2008, 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. [172]
On 9 October 2008, in an attempt to control the damage to Chinese dairy exports, officials at
a World Trade Organization meeting insisted that contamination had been "accidental", directly
contradicting the WHO observations. [173] Chinese trade representatives criticised countries which
have imposed blanket bans on Chinese food products. They urged member states to base import
restrictions on scientific risk assessments, and to use official WTO notification mechanisms. [174] On 11
October, Deputy Health minister Liu Qian stated that all the foreign companies' application for
compensation for dairy products recall would be dealt with on a commercial basis, although
government may use diplomatic channels if necessary, if problems were encountered. [175]
Stepped-up inspection program[edit]
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. [176]
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"; its inspectors had
removed 7,000 tonnes of melamine contaminated dairy products from shops all over China. [139]
On 4 October, 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. [177] 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 September were free from contamination. [178] The
General Administration of Quality Supervision, Inspection and Quarantine stated all dairy products
made before 14 September will be tested for melamine. They gave notice to all supermarkets,
shops, and all city, town and village-level vendors to urgently remove and seal up all powdered milk
and liquid milk made before 14 September, pending further testing. [citation needed]
Five government agencies, including the Ministry of Health, issued a joint statement on 9 October
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) - in line with standards recognised by the World
Health Organization and the UN Food and Agriculture Organization. A researcher at the Chinese
Centre for Disease Control and Prevention said that any amount exceeding 1 ppm would give
reason to suspect its presence was intentional."[179]
Public relations[edit]
On 26 September 2008, in order to quell the disquiet over the speech by Zhu Yonglan of the
CGOSFSC regarding leaders' insulation from the food-security issues faced by the general
population, 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". [180]
On 16 September, the AQSIQ tests on baby milk powder produced by 109 companies showed 69
batches from 22 companies to be melamine-contaminated; the State Council attempted to reassure
that formula produced by most companies in China was safe. It said: "the number of companies with
melamine-tainted milk accounted for 20.18% of the total of powdered milk companies in China; the
number of tainted batches accounted for 14.05% of the total batches tested." [181] On 30 September,
the AQSIQ said its tests on 265 batches from 154 companies showed that "only 18%" 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." [182]
On 16 September, the AQSIQ published results of tests on 408 liquid milk producers, and found
"most dairy products were safe to drink", although the test results showed nearly 10 percent of
batches from Mengniu, Yili and Bright were contaminated. [79]
The government stressed that no new cases of melamine-related illnesses had been detected since
20 September,[173] and that test results on samples from 31 brands of baby formula, 84 brands
powder for adult consumption, and 75 domestic brands of liquid milk produced after 14 September
did not contain melamine, the AQSIQ said. To demonstrate that its emergency measures had been
effective, the Ministry of Agriculture said the rate of raw milk dumping because of the contamination
scandal has decreased from 23.6% on 22 September to 4.6% on 1 October. [183]
Censorship[edit]
Behind the scenes, China's media was ordered to tone down coverage of the unfolding scandal to
prevent unrest.[184] 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.[55] The announcement of the AQSIQ test results was relegated
to the final item on the CCTV evening news.[58]
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.[54]
On 2 January, a website created by individuals protesting against Sanlu was also blocked by the
authorities. A group of parents whose children were rendered ill by melamine-contaminated milk held
a news conference to draw attention to the plight of their sick children; five were allegedly detained
by police and taken to a labour camp outside Beijing. [185] They were released a day later.[186]
In 2012, Jiang Weisuo, a 44-year-old general manager of a dairy products plant in Shanxi province,
was rumoured to have been murdered in Xi'an city. It was Jiang who had first alerted authorities to
the scandal. According to the Xi'an Evening News, Jiang died in hospital on 12 November from knife
wounds inflicted by his wife, Yang Ping, but the purported murder by his wife was subsequently
reported to be incorrect.[187]
Pressure on the legal profession[edit]
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 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 lawsuits were unleashed. [188] Pro-Beijing Hong
Kong journal Ta Kung Pao reported that central authorities, fearful of the effect of mass lawsuits,
held a meeting with lawyers' groups on 14 September, asking them to "act together, and help
maintain stability".[189]
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. [147] 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." [146] Zhang Yuanxin, lawyer and officer in the
Xinjiang Lawyers' Association said that the actions of certain departments in government have "set
back the development of the legal profession". He said that it was "intolerable" for government to
interfere in the affairs of the judiciary, denying the right of ordinary citizens to sue. [190]
An official said that central government had issued instructions placing the cases on hold, pending a
decision on how to handle the cases in a unified manner. Furthermore, that court was instructed not
to give any written replies or accept Sanlu-related cases in the meantime. [150]
Criminal prosecutions[edit]

Person Crime Sentence

Public endangerment.[191][192] Producing and selling 776 tons

Zhang Yujun Death[193]
of melamine-laced "protein powder".[citation needed]

Selling and producing toxic food.[192] Adding melamine-

Geng Jinping laced powder to fresh milk and selling to Sanlu and other Death[194]
companies[citation needed]
 Making and supplying melamine-laced "protein Death
Gao Junjie
powder"[citation needed] (suspended)[5]

Tian Wenhua
(former Life
chairwoman of imprisonment[195]
Sanlu Group)

Zhang Yanzhang, Life

a middleman imprisonment[5]

Xue Jianzhong
(owner of an Life
industrial chemical imprisonment[5]
shop)

Wang Yuliang
15 years
(former executive
imprisonment[5]
of Sanlu)

5 years
Xiao Yu Aiding and abetting her husband Gao Junjie [citation needed]
imprisonment[5]

Other third parties[edit]

On the economic root cause[edit]
Stratfor believed that the act of adulterating milk and baby food in full knowledge of potentially
severe sanctions, including execution, seemed like "an act of desperation". It noted that in 2008
dairy farmers became squeezed by growing costs of livestock, feed, facilities, and government-
imposed price caps. Mengniu's share price fell 12% since October 2007 because of higher costs of
raw milk (due partly to rising costs of cattle feed) and price controls—anti-inflation measures
targeted at the dairy sector announced on 16 January. Milk suppliers accordingly resorted to subtler
cost-cutting methods to preserve diminishing profits. [196]
On the damage caused[edit]
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". [197] 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."[198]
The similarities between China today and New York 150 years ago shouldn't come as a great surprise. Adulteration
on such a scandalous scale occurs in societies with a toxic combination of characteristics: a fast-growing capitalist
economy coupled with a government unable or unwilling to regulate the food supply. In such get-rich-quick societies,
there is a huge temptation to tamper with food, particularly when margins are low. The rewards are instant, and it's
not always easy for consumers to detect the difference between the pure and the doctored—particularly with a
substance like milk, which we have been taught to trust implicitly.[199]
Bee Wilson, The New York Times

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". [199]

The hopeful news in all this is that in the process of creating so much
toxicity both the distressed loans and the distressed food are teaching us
important lessons about the limits of scale and regulation that support the
massive globalisation of the last decade. We are learning that regulators
have lost the ability, if they ever had it, to truly monitor the extent of the
danger.[200]
David E. Gumpert, San Francisco Chronicle

An article published in the San Francisco Chronicle likened the regulatory failures of the milk scandal
to the distressed assets in the subprime mortgage crisis, and questioned whether regulators in either
case ever understood or truly monitored the extent of the danger. [200]
Louis Klarevas, a professor at New York University's Center for Global Affairs, said of the products
on the list of potentially harmful products reaching the US in recent years were exclusive to China:
"Yet as more large-scale labor markets compete for their share of international trade, the incentives
to cut corners will increase and the temptation to overlook hazardous goods might become a more
common occurrence."[201]
In the 10 November 2008 issue of the Singaporean newspaperToday, Bill Durodié, then a senior
fellow at the S. Rajaratnam School of International Studies responded to the possibility of more such
incidents in the future due to the more liberal trading relations with China by saying: "exposing the
Chinese to the world market is probably the fastest way of addressing these issues." [202]
On the power structure[edit]
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
dealing with problems as they arise.[154]
The dairy scandal has raised 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. [203] One analyst, Willy Lam, a
Senior Fellow at The Jamestown Foundation, indicated that CCP's pervasive control over political
and economic resources has resulted in the absence of meaningful systematic checks and
balances. "Institutions that could provide some oversight over party and government authorities—for
example, the legislature, the courts or the media—are tightly controlled by CCP apparatchiks." [88] 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.[203]
The Times reported that while one child in 20 in Shanghai could 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."[204]
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.[205]
Caijing said the crisis revealed 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." [206]
On the culture of secrecy[edit]
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". [207] 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. [54] Bandurski cited 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
cover of aggressive promotions.[208]
Former senior party official Bao Tong said "the more dark secrets are exposed, the better. You can't
cure the disease, or save the Chinese people, until you get to the root of the problem." "If the
Chinese government tries to play down this incident, there will be no social stability in China, let
alone harmony ... It will mean that this government has lost the most basic level of trust." [190]

On the Chinese social critics[edit]

As a reaction to and comment on the scandal, Chinese artist and video animation producer Pi San
created "Little Rabbit, Be Good" as part of his popular Kuang Kuang video series. [209] Though officially
banned or forbidden by the Chinese government, clever use of Chinese web services such
as Baidu allows Chinese citizens to access this and many other forbidden materials. [210]

On the relationship with Australia[edit]

Because of the high Chinese demand for quality Australian products, major Australian retailers
implemented tin limits to control sales of baby formula, but reports of daigou shoppers flouting the
system with people taking multiple tins of the formula before they’d been placed on shelves, and the
daigou shoppers stripping shelves in groups of up to eight people, before Australian mothers could
access the baby food.[211] This daigou activity has been facilitated by the Chinese Navy and its
warships.[212]

Widening contamination[edit]
The search widened when some manufacturers tested positive despite reportedly not using Chinese
milk. The Sri Lankan manufacturer of Munchee Lemon Puff biscuits, having tested positive in
Switzerland, categorically stated that its powdered milk or milk products were sourced only from
Australia, the Netherlands and Canada;[213] similarly, Pokka products without milk or its derivatives
from China were found by Vietnamese authorities to be contaminated. [214]

Chicken and eggs[edit]

Japanese and South Korean authorities' tests on imported powdered eggs from China found
melamine contamination. Japan found melamine in frozen fried chicken imported from China. [215] The
South Korean supplies were traced to two companies in Dalian.[216] On 26 October, Hong Kong
authorities discovered 4.7ppm melamine in eggs from Dalian. [29] Hong Kong Secretary for Food and
Health, York Chow, suspected the melamine came from feed given to the chickens that laid the
eggs.[29][217] On 29 October, Hong Kong authorities discovered a third batch of eggs containing
excessive melamine.[218] The Taiwanese Department of Health said that six batches of protein powder
from Jilin and Dalian were found to contain 1.90 to 5.03ppm of melamine. [219]
Agriculture officials speculated that adulterated feed given to hens could explain melamine in eggs.
The Web sites of Xinhua and People's Daily both carried a story from the Nanfang Daily that mixing
melamine into animal feed was an "open secret" in the industry: melamine scrap was mixed into an
inexpensive "protein powder" resold to feed suppliers. [220] People in the trade interviewed
by BusinessWeek also confirmed it was common practice, and had been going on for "years", with
most believing it to be non-toxic to animals. Melamine dealers said after Sanlu, the government
started clamping down on melamine sales to food processing companies or to manufacturers of
animal feed.[221]

Baking powder[edit]
Malaysian authorities determined that ammonium bicarbonate, not milk, imported from China was
the source of contamination at Khong Guan and Khian Guan biscuit factory.[222] Malaysian authorities
said it was probable cross contamination of batches from Chinese companies Broadtech Chemical
Int. Co Ltd, Dalian Chemical Industries and Tianjin Red Triangle International Trading Co, and did
not suspect adulteration.[223] On 19 October, Taiwanese authorities detected melamine in 469 tons of
baking ammonia imported from China. Samples tested showed up to 2,470ppm of melamine. [224]

Impact and response[edit]

International agencies[edit]
Jorgen Schlundt, head of food safety at the WHO criticised China's food-safety system for being
"disjointed", saying that "poor communications between ministries and agencies may have
prolonged the outbreak of melamine poisoning."[225]

Chinese public and the trade[edit]

Public concerns have resulted in demand and egg prices falling throughout the country. [225] Prices at
a large Beijing wholesale market dropped 10%,[226] and prices fell by 10% the day after news of the
contamination broke in Hong Kong. [227] Wholesalers have refused to stock products without melamine
inspection certificates. The Beijing Youth Daily reported that farmers had been forced to slaughter
tens of thousands of chickens.[225]
In 2008, Zhao Lianhai (赵连海), a Chinese man whose son was sickened by tainted milk earlier that
year, started a website called "Home for the Kidney Stone Babies" (结石宝宝之家,
jieshibaobao.com), which helped families with children affected by tainted milk share their
experiences, in part by maintaining a database of medical records. [228] The website upset Chinese
authorities, who detained Zhao in November 2009[229] and arrested him in December 2009.[228]
PRC government[edit]
The Chinese government said that producers violating the law "could have their licenses revoked
and be handed over to law enforcement organs". A senior Agriculture Ministry official said that of a
quarter of a million feed-makers and animal farms inspected for melamine contamination, inspectors
found more than 500 engaged in "illegal or questionable practices". Some 3,700 tonnes of feed with
excessive melamine were seized.[230]
Hong Kong regulators have requested certification of exported eggs, but the central government has
not yet mounted a centralised response; although mainland authorities already require eggs to be
certified as free of avian influenza and Sudan red dye prior to export following previous food-safety
scares, the AQSIQ has declined nationwide testing. Local government, for example Guangdong
authorities, have increased random inspections at poultry farms. They declared to "harshly crack
down on the unlawful behaviour of illegally manufacturing, selling and using melamine". [150]

Contamination and response in 2009–2010[edit]

On 2 December 2009, China detained three employees of Shaanxi Jinqiao Dairy Company in
northwest China suspected of selling 5.25 tons of melamine-laced powdered milk to Nanning
Yueqian Food Additive Company, in Guangxi.[231] On 30 December 2009, Xinhua reported continuing
problems: powder and flavouring products sold by another company involved in the original scandal–
the Shanghai Panda Dairy Company–were found to contain illegal levels of melamine; the dairy was
closed and three of its executives arrested. [232] On 25 January 2010, it was reported that three food
companies from Hebei, Liaoning and Shandong provinces had produced melamine tainted products
in March and April 2009 and that the three companies were banned from selling products
in Guizhou.[233] On 10 February 2010 China's state council announced a food safety commission,
consisting of three vice premiers and a dozen minister-level officials, to address the nation's food
regulatory problems. The group aims to improve government coordination and enforcement and to
solve systemic food safety problems. As part of its ongoing effort to find and destroy any melamine-
tainted milk remaining on the market, the Chinese government announced that it was recalling 170
tons of powdered milk laced with the industrial chemical which was supposed to have been
destroyed or buried in 2008 but has recently found to have been repackaged and placed back into
the marketplace.[234]
In July 2010, Xinhua reported that authorities had seized 64 tonnes of dairy product contaminated
with melamine from Dongyuan Dairy Factory, in Minhe County, in Qinghai, after authorities
in Gansu discovered the contaminated powdered milk. Approximately 38 tonnes of raw materials
had been purchased from Hebei, raising the possibility that traders had bought tainted milk that was
supposed to have been destroyed after the 2008 scandal. Police have detained the owner and
production director of the factory. Powdered milk produced in the plant was mainly sold
in Zhejiang and Jiangsu, with only a small amount sold in Qinghai. Also, in Jilin, authorities were
testing samples of suspect powdered milk produced in Heilongjiang.[235][236]
At the end of June 2010, Beijing lowered the minimum protein level for raw milk, from 2.955 to 2.8%,
to discourage dairy farmers from attempting to falsify the passing of protein tests. Wu Heping,
secretary general of the Heilongjiang Dairy Industry Association noted that between 75% and 90% of
raw milk in some provinces had failed to reach the old protein level standard (in place since 1986) in
2007 and 2008. He said that the new standard reflected "the reality of the domestic dairy farm
industry". However, insiders believe this will not stop adulteration because milk price still depends on
protein content.[237]