FDA Warns of Products in U.S. Tied to Tainted Milk

(Wall Street Journal)

 

A little-known brand of instant coffees and teas became the first recalled product in the U.S. connected to China's tainted-milk scandal Friday, while a New Zealand company tied to severe baby-formula contaminations in China said it had failed to notify the public for weeks because local Chinese authorities forbade it.

 

The U.S. Food and Drug Administration warned consumers against drinking seven Mr. Brown coffee and milk-tea products because of concerns they may be contaminated with melamine, a toxic chemical that in high concentrations has caused kidney illnesses in 50,000 Chinese infants, and at least three infant deaths. The FDA said Taiwan-based King Car Food Industrial Co. is recalling the products over the concern. The FDA has no report of illnesses in the U.S., but the agency now is testing samples, said a spokeswoman.

 

Late Friday, the FDA said White Rabbit Creamy Candy also was being recalled by U.S. distributor QFCO Inc. of Burlingame, Calif. because of possible melamine contamination. The popular Chinese candy already has been pulled from store shelves in New Zealand, Hong Kong and elsewhere after melamine was found in samples. The agency also said Friday that it is expanding its testing of milk-related products sold in the U.S.

 

The FDA is trying to determine how widespread the candies and coffees are in the U.S., where they are often sold in U.S. neighborhoods with large Asian populations. The candies -- and Mr. Brown ground coffees -- often are more common than the recalled brands of instant coffee. The FDA said checks of hundreds of ethnic markets have found no infant formula from China.

 

The U.S. recalls join a new one in Hong Kong, where H.J. Heinz Co. said late Friday it will recall a batch of 270 cases of baby food because it showed trace levels of melamine, though the company described the move as a "precaution" because the levels were far below Hong Kong's safety standards.

 

The melamine scandal is taking on added importance because China, already the world's factory floor, is emerging as a major exporter of food products. According to government statistics, food and livestock exports in 2007 were up almost 20% from the year before and 150% from 2000. That doesn't take into account all the ingredients, such as milk powder, that are being exported for use in foods prepared overseas.

 

"It's the world's largest provider of food ingredients and it's all unregulated," said Leo Hepner, a London-based food industry consultant.

 

Initially only a problem with baby formula, traces of melamine have been found in many dairy products produced in China, sparking the European Union, India, South Korea and others to recall or ban Chinese products.

 

On Friday, the chief executive of New Zealand dairy producer Fonterra Co-operative Group Ltd. made his first detailed comments about the series of events -- from early suspicions of problems with baby formula to the public disclosure of melamine contamination two weeks ago.

 

Fonterra CEO Andrew Ferrier, whose company has been criticized by New Zealand's prime minister and others for not coming forward earlier, repeated the company's explanation that local Chinese officials forbade a public recall of poisoned milk. Mr. Ferrier added that local Chinese authorities misled the company into thinking central health authorities in Beijing had been notified.

 

Fonterra is 43% owner of Shijiazhuang Sanlu Group Co., the formula producer with by far the highest levels of melamine detected. Sanlu's board was informed of the melamine contamination on Aug. 2, Mr. Ferrier said, though Beijing authorities have said Sanlu officials knew of reports of children becoming sick after drinking its formula since March. The news didn't become public until Sept. 11.

 

Mr. Ferrier said in a phone interview that the company struggled to deal with Chinese authorities to ensure a recall "as quickly as we could in the environment we were working in." He added that the company was "enormously frustrated" with the lack of public disclosure. "It gave us in Fonterra a really fundamental dilemma," he said in the interview.

 

Local health officials in the city of Shijiazhuang, the home of Fonterra's joint venture with Chinese partner Sanlu Group, were "crystal clear," Mr. Ferrier said. "They said you can have a recall but there's no going public." He said they cited the need to have social stability as well as protect public health, and that he believed trying to circumvent their wishes would hurt the recall effort.

 

China's central government has fired and detained several local authorities and blamed them for covering up the contamination. Wu Xianguo, the Communist Party chief of Shijiazhuang, was fired Monday for "delaying the reporting of the issue to higher authorities and incompetence in the disposition," according to a report by China's state-run Xinhua News Agency. Shijiazhuang's local government and China's health and safety regulators all declined to comment on Fonterra's allegations Friday.

 

Fonterra, a cooperative owned by 11,000 New Zealand farmers, paid $107 million in 2005 to buy its share of Sanlu. Sanlu was the first of 22 companies found to have formula laced with melamine, an industrial chemical sometimes added to boost the apparent protein levels of low quality milk.

 

"If information had been reported as soon as it was learned, we would not have seen an incident of this scale," said Dr. Hans Troedsson, China representative of the World Health Organization, said in a statement Friday, blaming the actions of local Chinese authorities and milk suppliers. He did not comment directly on the roles of Fonterra or Sanlu.

 

A day after the Aug. 2 board meeting, Mr. Ferrier said, Fonterra's China directors met Shijiazhuang health authorities and asked for a "full public recall." Officials shot down notifying consumers, but backed taking the product off shelves. The company decided to cooperate, Mr. Ferrier said, because they feared officials would shut them out. He said Sanlu quietly retrieved over 10,000 tons of tainted milk powder.

 

"The other option was to go public outside of China ... to put pressure on," Mr. Ferrier said. But the company felt it would "lose control of the whole thing." Aug. 2 was less than a week before the Olympics, and China's central government had made order and social stability the number one priority. "We made the call as we saw it," he said. "At least we were effective in recalling the product."

 

Fonterra's executives felt they were misled by local health officials, who they believed had notified the central government, he said. But as the weeks passed, Fonterra executives in New Zealand and Beijing debated over daily conference calls on how to proceed. On Sept. 5, Mr. Major formally met with New Zealand embassy officials in Beijing for advice. Accounts differ as to whether there were other contacts earlier.

 

In the U.S., the FDA says officials now are checking Asian markets for other Chinese products that could contain "a significant amount of milk or milk proteins." It has expanded testing from baby formula to cover milk-derived ingredients and products containing milk, including candies, desserts, beverages, and whole milk powder.

 

Other major U.S. food manufacturers have said they're not affected by the melamine contamination. Kraft Foods Inc., the world's second-largest food maker by sales after Nestlé SA, said its operations outside China do not source any dairy ingredients from that country. 9-27-08

 

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