Monday, September 15, 2008

Infant Formula Disaster: Blame the Farmers

Over 1,250 (so far, the number keeps rising day by day) babies have become sick and two have died from consuming infant formula adulterated with melamine—a chemical derived from coal.

This scandal combines elements from two of China’s biggest food safety incidents. You’ll recall that the big publicity about food safety problems with Chinese food imports started in 2007 when dog and cat deaths were linked to melamine. China’s watershed domestic food safety incident came in 2004 when a series of babies died from malnutrition due to fake infant formula that had little nutritive value.

The latest problem is centered in Gansu Province in western China where babies had been showing up at hospitals with kidney stone problems since March or April of this year. The link among the cases was that all the babies consumed the same brand of milk powder. According to the Chinese Xinhua article of Sept 11, the condition found in the babies is usually the result of poor nutrition typically found only in malnourished children or elderly people. Parents in Nanjing, Shandong, Anhui, Hunan, Beijing and other areas have also reported children with similar symptoms from consuming the same brand of milk powder. Emotional parents are milling about outside the gate of the Sanlu Group waving cans of powder and demanding to know why they weren't told about the contaminated formula their babies were consuming.

A disturbing aspect of this case is that the company selling the milk powder is Sanlu Group, one of the leading dairy companies and the largest purveyor of milk powder in China. Discussions of food safety problems in China invariably point to small businesses as the problem. Consumers tend to trust companies with well-known brands and products sold in supermarkets. As one parent was quoted, “This brand (of milk powder) is bought in reputable supermarkets, the price is low, the brand is well-known, and we felt confident in purchasing it.” One approach to ensuring food safety is to rely on the incentives of big companies to protect the value of their brand to make sure their products are safe.

A spokesperson for Sanlu company refused to admit culpability as recently as a September 11 article, arguing that there was still no proof that the illness was caused by their milk powder. The problem had been widely known since at least July due to a concentration of hospital admissions in Gansu and the company had received dozens of complaints from parents in various provinces as far back as March. The company’s testing revealed the presence of melamine in August. The company has recalled 700 tons of milk powder produced before August 6. The loss to the company has been estimated at over 600 million yuan.

True to form, the incident is being blamed on rogue dairy farmers. Police have detained a bunch of them. Reports from provincial newspapers dutifully report the number of officials working on checking for bad milk powder, the exact number of supermarkets, products, companies, and factories checked, and number of suspected cases.

In an article posted on, A journalist questions whether this is the full explanation and asserts that a full investigation is needed.

The journalist consulted a dairy technician who told him that the problems could have been caused by excessive antibiotics in the raw milk, failure to desalinize the additives in milk powder, or other factors. According to a dairy farmer named Gao in Hebei Province, he had heard a couple of years ago that it was common practice to add urea to milk so it would pass tests. According to publications consulted by the reporter, urea contains melamine, the substance believed to be behind the kidney problems. Another dairy farmer admits that small farmers may be at fault, but asserts that the company should bear some responsibility as well.

The reporter says that both domestic and foreign milk powder companies have encountered quality problems in the last few years. He refers to the notorious Fuyang milk powder incident referred to above in which Sanlu was suspected of involvement but escaped culpability. There were many small milk powder producers that were displaced by large domestic milk powder companies that now challenge foreign brands. Industry insiders are now wondering how this disastrous incident will affect Sanlu’s good image. Moreover, the collateral damage from the public relations disaster could spill over to all domestic milk powder producers.

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