China Says More Dairy Makers Have Contaminated Milk

(Bloomberg News)

By Jiang Jianguo and Theresa Tang

 

China, embroiled in the tainted milk scandal that has killed four babies, said 15 more companies were found to have contaminated products as it widens a crackdown to allay food-safety concerns that have led to global bans.

 

About 31 batches of adult milk powder contained the chemical melamine, the Administration of Quality Supervision, Inspection and Quarantine said in a Sept. 30 statement. That brings the total number of producers affected to 37.

 

China may halt exports of dairy goods until their safety is verified, Agence France-Presse reported, after more than 20 countries and markets worldwide banned Chinese milk or products made with it. Unilever, Cadbury Plc. and Japan's Kanematsu Corp. have recalled Chinese-made goods.

 

The contaminated products found in the latest tests on 154 companies' goods have been pulled from shelves, according to China's quality regulator. One item was made by a company partially controlled by Beijing Sanyuan Foods Co., according to the government.

 

Officials at Beijing Sanyuan couldn't be reached for a comment. Chinese companies and the government are shut for a week-long holiday.

 

Taiwan Order

 

Sanyuan suspended trading on Sept. 26 for an acquisition announcement. The stock jumped 77 percent in the six days before the suspension after it was initially cleared of melamine contamination in products tested by the government.

 

Nestle SA, the world's largest food company, was ordered by Taiwan authorities to stop selling Chinese-made Neslac infant formula and Klim powdered milk in Taiwan, prompting a rebuttal from the Swiss company which said all of its dairy products made in China are safe.

 

About 53,000 babies have been made ill by melamine-tainted milk, according to Chinese government officials.

 

Chinese officials promised foreign diplomats that it would halt exports of dairy products until the melamine contaminations were eliminated, Agence France-Presse reported today, citing an unidentified Japanese official in Beijing.

 

An official at China's commerce ministry, who declined to give his name, said he is unaware of the export ban. Officials at the country's foreign ministry couldn't be reached for comment.

 

Sanlu Group

 

Melamine, a chemical used in lamination and plastics, was added to diluted milk to boost protein readings, according to the Chinese government. The chemical was first found in infant milk powder produced by Sanlu Group Co., and was also found in products of China Mengniu Dairy Co., Inner Mongolia Yili Industrial Group Co. and Bright Dairy & Food Co.

 

Shijianzhuang, Hebei-based Sanlu Group Co. had lobbied municipal authorities to manage news reports about its melamine- contaminated products, the People's Daily reported yesterday, citing a government official.

 

Sanlu had informed the city government as early as Aug. 2 that melamine-contamination may have led to kidney stones in infants, the report said, citing Shijiazhuang spokesman Wang Jianguo. Sanlu also asked the government to investigate and arrest those found to be responsible for the contamination, the newspaper said.

 

Calls to Sanlu's offices over the past two weeks haven't been returned.

 

China's Ministry of Health has reported three infant deaths caused by melamine-laced milk between May and August. The government of the northwest Xinjiang region reported a fourth death on Sept. 18, without saying when it happened. The government hasn't provided an update on the death toll or the number of babies hospitalized since Sept. 21.

 

 

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