China's Milk Scandal Bares Government Shortcomings

By: AP
By: AP

BEIJING - The note posted in July on the Web site of China's food safety inspection agency came from a doctor: There had been a sudden rise in infants turning up at his hospital with kidney stones after drinking the same brand of formula.

The warning, which urged an investigation, went unheeded. In the two weeks since China began piecemeal reporting about contamination of the milk supply, a picture has emerged of official indifference, greed and government dysfunction.

Among the startling details: the practice of adulterating milk was widely known in the industry, and one dairy knew since late last year that its formula was sickening children.

The revelations have dismayed a broad segment of the public — parents — who feel the government has breached their trust. Tens of thousands of children have sought medical care, nearly 13,000 have been hospitalized and four infants have died.

"I'm just disappointed because the government should have done more to protect its citizens," said Liao Yanfang, a migrant worker whose 1-year-old son was found to have kidney stones Tuesday at Beijing Children's Hospital. Since birth, her only child had been drinking infant formula made by the company at the center of the scandal, Sanlu Group Co., she said.

"I fed my baby powdered milk because ads said it was more nutritious than breast milk. We trusted that the government would provide adequate tests to ensure food quality," she said.

In the past two weeks, Beijing has recalled a broad array of milk products — all tainted by the industrial chemical melamine — and arrested Sanlu's chairwoman and several suppliers. It has dismissed officials and offered free medical care to the afflicted. "Nothing like this will ever happen again," Premier Wen Jiabao pledged.

But questions remain about why food and health inspectors ignored growing signs of trouble in the milk supply and when the communist leadership knew about it. Galling to many Chinese is the suspicion that high-level pressures for a successful Beijing Olympics added momentum for a cover-up.

"The dairy products for the Olympic Games were safe. I think the inspection agency already knew about it, and they tried to protect the 'national brand,'" said Zhou Ze, a law professor at China Youth University For Political Science.

Regaining the confidence of the Chinese public and the world is likely to take concerted doing. The scandal has battered the government's image, so carefully cultivated during the Olympics.

Governments heavily courted by Beijing have sounded the alarm. Normally pro-China Singapore has banned the sale and import of Chinese dairy products, from yogurt to candy. At least nine other countries have done the same.

Other nations, from Canada to Australia, have increased testing of Chinese food imports. The European Union ordered customs inspectors Tuesday to be on alert for products such as bread or chocolate to insure they contain no contaminated milk.

In the U.S., the Food and Drug Administration expanded its sampling of imports from Asia to include dairy-based candies and desserts. Over the weekend, the agency announced it had started checking imports of bulk food ingredients, including milk powder, whey and some milk-derived proteins. No tainted products from China have turned up.

The overall impression is of an authoritarian government struggling to enforce its writ on a rapidly developing country where officials and businesses often go their own way.

Just four years ago, Premier Wen issued an apology and promised greater transparency when official cover-ups aided the spread of SARS from China to the world. Last year, after exported pet food, cough medicine, toothpaste and toys made with toxic products sickened and killed pets and people in North and South America, the government promised to overhaul safety inspection regimes.

"Although after SARS, the government promised a more open media environment and to protect people's right of expression, without essential measures, it's just empty talk. What is really needed is to change the system's framework," said Yang Fengchun of Peking University's School of Government. "The government and companies have lied to people, so it becomes very difficult to make people believe again in what they say."

This time around, promises of official oversight fell flat in the boisterously growing dairy industry. Almost nonexistent two decades ago, the industry has boomed, transforming once scarce milk and milk powder into staples that have boosted nutritional levels and health from the urban middle class to the rural poor.

Unlike the United States, where dairies run farms with thousands of cows and are better able to control quality, milk in China comes from a patchwork of producers. Most are small farms with just a few cows who sell the raw milk to collection stations, which in turn sell mainly to giant dairy processing companies.

"The middleman is where the system breaks down totally," said David Oliver, a New Zealander who is a dairy industry consultant in Beijing.

Two giant processing companies — Mengniu Dairy Group Co. and Yili Industrial Group Co. — control nearly 60 percent of the total market for milk, yogurt and other dairy products, according to Beijing Orient Agribusiness Consultant Co.

But in the past three years, prices for feed, fuel and other costs rose — feed by as much as 30 percent. Further pressures came last year when Beijing enacted price controls to tame double-digit inflation for food.

Milk collectors found themselves squeezed between the farmers asking for more money and the processors who demanded that prices be held down, said Chen Lianfang of Orient Agribusiness.

That squeeze gave suppliers incentives to tamper with the raw milk, watering it down and then adding ingredients, said Chen.

Melamine, a relatively cheap binding agent used in plastics and as a flame retardant, is rich in nitrogen, fooling widely used tests that check for protein. When mixed with formaldehyde, it dissolves in water.

In the wake of the scandal, inspectors found melamine in products from Yili, Mengniu, Sanlu and 19 other dairy companies.

Government officials have painted the middlemen as the main villains. A vice governor of Hebei province, where Sanlu is located, said one of the dairy's suppliers began using melamine three years ago.

Chinese health officials have said no harm comes from consuming tiny amounts of melamine, less than 0.63 milligrams per kilogram. But some of Sanlu's infant formula contained up to 4,000 times that amount, as much as 25 milligrams per kilogram.

Trouble with Sanlu's products began brewing last December, with parents complaining to the company about infants sickened by formula, Chinese state television said. Sanlu bought off one complainer with free milk products. Doctors and reporters also sounded warnings.

At an editorial meeting at one state-run newspaper last week, editors were told that its Hebei-based reporter wrote an "internal reference" sent to Beijing in March about contamination of Sanlu products, said two participants. They requested their names and that of their newspaper not be used for fear of retribution by officials.

A pediatric urologist, Feng Dongchuan, said in a posting July 24 on his online journal that he had treated seven infants for kidney stones at the Pediatric Hospital in the central city of Xuzhou, an unusually high number.

"Coincidentally all consumed a certain famous domestic brand of formula," Feng wrote. He said more cases were reported in nearby Nanjing.

That day a urologist who would not give his name sent a similar warning to the General Administration of Quality Supervision, Inspection and Quarantine, naming the brand of formula — Sanlu.

The reply, posted a week later, said: "Please report this problem to the health departments."

Meanwhile, Sanlu was quietly ordering distributors to remove milk powder and infant formula, distributors said. China Central Television said Sanlu knew in June that tests had detected melamine.

At board meetings in the Hebei capital of Shijiazhuang on Aug. 2 and again on Aug. 9, Sanlu executives were confronted by the dairy's New Zealand investor, the Fonterra cooperative, which urged them to go public. Company executives and local government officials refused.

The central government said it only learned of the scandal Sept. 8 — it does not say how — even though inspection, health and other government departments in Hebei and Beijing knew earlier.


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