China's Poisoned Milk Scandal Spreads

Posted by: Bruce Einhorn on September 22, 2008

The American financial crisis may be dominating the headlines in most of the world, but in China the top story is the scandal involving milk contaminated with the industrial chemical melamine. After all of the Made-in-China scandals last year surrounding toys, food, drugs and other products, you might think this is a dog-bites-man story: Some Chinese factories use hazardous materials in their products? Everyone already knows that. Still the numbers here are shocking: Nearly 53,000 Chinese children - almost all of them babies - sickened, 13,000 hospitalized, over 100 in serious condition, and at least four dead after developing kidney stones caused by the tainted milk.

And this scandal is just beginning. Until a few days ago, it was a China-only story, but now it’s spreading beyond the PRC. Supermarkets in Hong Kong have yanked some dairy products from their shelves after a local girl was hospitalized after drinking mainland milk. A Taiwanese company, King Car, has recalled its instant soup and powdered coffee. A Japanese company, Marudai Food, on Saturday announced a recall of five products made with Chinese milk. In Singapore, the BBC reports, officials have ordered a recall on White Rabbit candy after finding the Chinese-made sweet contained melamine. “Recalls of Chinese-made dairy products are now under way in Japan, Malaysia, and Brunei as well,” the BBC says. Three African countries have banned Chinese milk imports, reports AFP.

So far no American company has had to recall anything because of this scandal. But with so much of the processed food industry having shifted production to China, don’t count on that luck lasting. Let’s hope I’m wrong, but it’s probably just a matter of time before companies start pulling food containing Chinese milk from American store shelves.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/

Reader Comments

blowfish

September 22, 2008 01:27 PM

After the Grand style of Olympics we get another bigger bang, namely tainted milk.
What else is safe?
Chinese product is becoming the Murphy's law of all product.
And Just about every line there is a representation.
Exploder Tires can almost keep up with Firestone.
Pet food, Cars cannot pass crash test.

Is not going to take very long to be bestow with the Rodney Dangerfield award of Manufacturing country.

Our Chinese say paper cannot contain fire.
Some major fundamental flaws in our work ethics.
Or trying to prove PT Barnum is wrong, we can fool all the people all the time. Suckers born every seconds.
Will take Poland in the Spring.

Being born in Hong Kong all these wonderful news make me feel pretty proud.
Pretty soon if people ask me if I am from China perhaps I should say I am Canadian Aboriginal people.
Atleast being labelled as Drunk most of the time is still better than making dangerous goods that either kills or maim.

Squeezebox

September 22, 2008 01:50 PM

I'm wondering if the melamine came from doctored cattle feed? It was in the grain last year, it could still be lingering in the cattle.

MetroEV

September 22, 2008 02:15 PM

China is too big to be solely controlled by a dictatorship government. In the old time, very few social activities existed in the poor society except those political meetings to honor the leaders. The society was relatively simple for a central government to handle. 30 years after opening, a lot of Chinese dramatically improve their financial status and the social activities--good or bad among residents exponentially increase. No human organization can control effectively a billion plus human body full of social activities. I bet more disasterous accients will follow if the ccommunist central government still don't release some authority to local governments. Chinese people should know that, if the political freedom still does not follow 30 years after Deng's ecomnomical reform, China is going no where and this is getting obvious from the fact that serveral big accidents had happened right after glorious Olympic game. Echoing "let some people get rich first" with "let some people get political freedom first", by promoting Deng's "Single Country with Two Systems" in China itself to spread political freedom gradually to all parts of China, not to use it as a tool to unify Taiwan, that is terribly wrong.

Richard

September 22, 2008 02:16 PM

China's problem is that it's political system overshadows the regulatory system, a system where nepotism, cronyism and party affiliation reign supreme over and above the needs of community. Hopefully this scandal will expose the deep rooted corruption that their political system breeds, and maybe bring China one step closer to a Government based on rule of law rather than the demands and needs of their corrupt political system.

China Man

September 22, 2008 02:25 PM

This is one good thing about the Chinese govt. - Someone takes responsibility and either kills himself of resigns

China Man

September 22, 2008 04:20 PM

Trust the Chinese...

Bob

September 22, 2008 06:01 PM

Shame, shame, shame on the Chinese government. They have let down their smallest and most vulnerable citizens.

Im my view this is a consequence of a system they have nurtured and that sees no issue with allowing the peddling of fake handbags, watches, pharmaceuticals etc. etc. People have obviously thought - why should milk be any different? A direct response to a system in which ethics and decency now come a very distant second to making a cheap blood stained buck.

Let's all pray that the children make a speedy and complete recovery.

BeijingMan

September 23, 2008 01:05 AM

Foreigners (U.S, EU) may sleep their nights well, China will not become a superpower with it's Guanxi based favor exchange culture. Guanxi disables quality and real innovation.

BeijingMan

September 23, 2008 01:08 AM

Foreigners (U.S, EU) may sleep their nights well, China will not become a superpower with it's Guanxi based favor exchange culture. Guanxi disables quality and real innovation.

Marc Jr

September 23, 2008 02:12 AM

So bad for sacrificed babies.
I don't know why most of Chinese want us to make their reputation higher than where they are.
Interestingly enough, at the same time they just spoiled themselves with damm fake, and dangerous product they make.

Fake product, Fake i-phone, Fake Cars
even Fake Food to their children. tsk...

A

September 23, 2008 03:10 AM

i heard from my foreign teacher from America said that this kink thing happened in America several years ago

Interconnect

September 23, 2008 04:59 AM

The controversy with PRC started with trade deficit after opening of the Chinese markets courtesy WTO. Chinese products were/are cheap, may not be compliant to ISO. A great consumer/producer nation, with Chinese own standards, many compliant to ISO, some aren't. Export products are certified with origin/inspection, food safety certification subject to compliance of storage, environmental standards by the beneficiary/importer. Trade from China today witnesses in largest retail chains as Wal Mart, Carrfour and many big interntional names. What is new is the some media being unhappy, had triggered small incident of pack which possibly be due to environmental, storage condition is bad has taken the media by storm for many Chinese products. Many regional partners as Pakistan, India, Bangladesh are large importers from China. Why no body from India, Pakistan, Bangladesh, Sri Lanka do not complaint about PRC product as toys, cars, fruit, milk, yogurt. Suggest to please check with the regional partners of China as Pakistan with FTA, PTA treaty being ratified are mostly dependent of imports from China. There's not a single incident of any dairy, agricultural defective product in Pakistan heard to be defective and reported to the media. So please listen carefully with two years. eMail: haroon.rashid@akunet.org

Steve

September 23, 2008 06:23 AM

China will learn from its mistake. Just 10 years ago, rarely you can see people drink dairy milk. This show, China has been progress quite far up to now, sure it will step 1 back after 2 step forward. I have full confidence China will resolved it as it has done in the 3000 years of time

Curious

September 23, 2008 08:39 AM

Greed is does not know boundary. Milk powder is used in variety of products such as confectionery, ice cream and biscuits.

Only countries who have strict regulation and able to trace all product components to their raw base(s) will be exempted from this problem.

Newbie

September 23, 2008 11:30 AM

All, Steve has asked us to wait for 3000 years. Please be patient.

@ Interconnect (Haroon Rashid). India is the world's largest milk producer. Hence it does not need to import milk. Bangladesh has also banned Chinese milk and milk products. Even Burundi, Tanzania and Gabon have banned Chinese milk products. Even if contamination is detected and reported in Pakistan, it doesn't matter, because Pakistan does not matter to the world. Just check out, nobody wants to play cricket there.

Proud Chinse

September 23, 2008 03:15 PM

blowfish of course you are very proud of from Hongkong since your were milked by British colonis (assume you are really Chinse descandant). We are still trust The Chinese can sovled this problem. Especiaaly big problem. First The fat cat could not hire some lawyers to protect them like to west.

Optimist

September 24, 2008 12:58 AM

I believe the practice of mixing melamine with milk is very perversive in China. Just that is has been detected and widely reported now. I am sure there are many things have yet to be reported.

My operating principle has been 'All Chinese products are tainted / contaminated / fake unless proven otherwise". It has served me well.

Haav

September 24, 2008 01:29 AM

Toxic stuff in milk is giving China lots of trouble. Coincidently, toxic stuff in American financial system is giving the whole world a lot of grief.

Ironcially, both events share the same cause-effect relationships. Both envolve new business & new products that grew quickly before a system to regulate and monitor the business is in place. People involved cheat and cover up because they all benefit from these new businesses. The offenders in China will go to jail and probably be executed. The offenders in USA already had their golden parachute and probably looking to make big bugs again out of the 700 Billion bail out package.

SNblogger

September 24, 2008 12:02 PM

Globalization definitely has its benefits but the so called “flat world” brings challenges in dealing with cases like this when companies are faced with making decisions that have to do with contaminated products. It’s definitely more difficult to make a decision that impacts a global audience. It is comforting to see that some Chinese companies have ordered product recalls, but I wonder if they already had a system in place that dictated their course of action. I just read that some African countries that import Chinese diary products have issued bans. It is one thing for China to recall contaminated products in its own provinces, but when products cross the ocean, who becomes responsible for the safety of the consumers abroad? I hope it was China that alerted countries that import from them.

just me

September 28, 2008 11:15 AM

can anyone tell me what US products contain this milk? sure wish i had my cow back. at least i knew which pasture she grazed in yesterday.

Post a comment

 

About

BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

BW Mall - Sponsored Links

Buy a link now!