More Countries Ban Chinese Products Amid Milk Scandal

(Wall Street Journal)

By LORETTA CHAO in Beijing and SIMON LOUISSON in Wellington, NEW ZEALAND

 

China's recent troubles with contaminated milk are prompting more skepticism in other countries about its quality control, despite authorities' efforts to contain the crisis.

 

A Chinese dairy factory worker monitors the production at a plant in Wuhan, central China.

 

Countries stepped up testing of foods imported from China after Chinese authorities disclosed that the industrial chemical melamine had tainted products -- including liquid milk, yogurt and candy -- made by 22 companies. Baby formula contaminated by melamine has killed at least three babies and sickened more than 50,000. Taiwan and Indonesia have now joined the list of at least 12 regions that have banned Chinese-made dairy products.

 

New Zealand's Food Safety Authority warned the public on Wednesday that "unacceptable" amounts of melamine were found in a popular Chinese candy called "White Rabbit Creamy Candies." British supermarket chain Tesco PLC said it recalled the candy as a precautionary measure from its stores in the U.K., China and Malaysia.

 

U.S. and European consumer-safety officials said the crisis highlights the need for better enforcement of public-safety standards at all stages of manufacturing. "You have to know what's coming into your factory and what's going out of your factory," said Nancy Nord, acting head of the U.S. Consumer Product Safety Commission.

 

Ms. Nord and other U.S. and European officials were in China promoting compliance with product-safety regulations that were tightened following a spate of scandals last year over unsafe or shoddy products, including toys, tires, drugs and pet food.

 

The milk scandal also has proved damaging to New Zealand dairy giant Fonterra Co-operative Group, which in 2005 bought 43% of Shijiazhuang Sanlu Group Co., the first Chinese dairy company to be implicated. Sanlu's products were laced with the highest concentrations of melamine found to date, and authorities say the company was responsible for a coverup lasting for at least months that caused even more children to get sick.

 

Fonterra said Wednesday the scandal had affected its financials. It booked a 139 million New Zealand dollar (US$95 million) impairment charge against the carrying value of its investment in Sanlu. That left a residual value of NZ$62 million in Sanlu, mainly its physical plant. Still, Fonterra said it remained committed to China.

 

A Philippine official inspects milk at a store in Manila. Chinese food products in several countries are being removed from shelves over contamination fears.

 

In an effort to assure the world its products are safe, Chinese regulators said this week that the tainted-milk scandal has been brought under control and milk samples tested since Sept. 15 showed no traces of melamine. 9-25-08

 

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