Friday 20 February 2009

Mengniu Dairy product is target of fresh inquiry

The mainland’s product quality watchdog says it is investigating the safety of a premium dairy product made by the country’s top milk producer, China Mengniu Dairy.

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Guanyu said...

Mengniu Dairy product is target of fresh inquiry

12 February 2009

The mainland’s product quality watchdog says it is investigating the safety of a premium dairy product made by the country’s top milk producer, China Mengniu Dairy.

The news comes nearly six months after a massive scandal in which tainted milk products were blamed for killing six babies and making nearly 300,000 sick.

The General Administration of Quality Supervision, Inspection and Quarantine said yesterday it was assessing the safety of a bone-strengthening additive Mengniu used in its high-end brand Milk Deluxe.

The additive is called osteoblast milk protein (OMP).

“The state is involved in a comprehensive cleanup on the use of food additives,” the watchdog said. It did not say whether it had ordered Mengniu to stop using the additive.

Meanwhile, quality inspectors in Shanghai were investigating whether Danone Dumex, the powdered-milk unit of France’s Danone Group, produced milk powder contaminated with the harmful chemical melamine, Xinhua reported.

The Shanghai Municipal Bureau of Quality and Technical Supervision was investigating the safety of Dumex milk powder made before September 14, Xinhua said.

Xinhua said the investigation into Dumex came after media reports on the mainland that babies had fallen ill after consuming melamine-tainted Dumex products.

Mengniu and Dumex insisted their goods were safe. Danone Dumex said on its Chinese website that reports of tainted milk powder were false and its products were safe.

Shares in Hong Kong-listed Mengniu, the country’s No 1 milk producer, slipped by as much as 22 per cent during the day. Its stock closed down 12.48 per cent to HK$10.10.

Mengniu said consuming osteoblast milk protein was safe and it was recognised by the US Food and Drug Administration.

Chan King-ming, biochemistry professor at the Chinese University of Hong Kong, said the additive was mainly for therapeutic uses such as curing osteoporosis and it should not be added to food.

“It is uncommon to add it to food ... and too much of it may cause bone cancer,” Professor Chan said. “We are worried about the way the extra proteins are added into the milk, whether it is added with a carrier or if there is any contamination.”

Wang Dingmian, executive director of the Dairy Association of China, said whether or not the additive was safe, Mengniu violated government rules by using an unapproved additive in food.

Mengniu said the incident should not concern Hong Kong consumers. “Mengniu products under the Milk Deluxe brand sold in Hong Kong are OMP free,” a spokesman said.

Wellcome said it took the milk products off shelves but a reporter bought a pack of six shortly before 5pm. ParknShop and Jusco said no Mengniu products had been sold in their stores since September.

Mengniu was among 22 dairy companies whose products were found to be laced with the industrial chemical melamine that in high doses causes kidney stones. Melamine is an industrial chemical used to make plastics and glue. It is added to substandard food, such as watered-down milk, to boost its nitrogen content, allowing it to pass protein tests.

Analysts said the inquiry would be another blow to the milk producer following the melamine scandal.

“Although the sales of Milk Deluxe accounted for less than 2 to 3 per cent of Mengniu’s total revenue, this safety issue will damage its brand and reputation,” said an analyst who declined to be named. “If the additives prove to be harmful, it would be another disaster for Mengniu, which is in an uphill battle to regain consumer and investor confidence.”

Mengniu and rival Yili Industrial Group, both based in Hohhot, Inner Mongolia, recently received 3.57 billion yuan (HK$4.06 billion) in loans from the Inner Mongolian government. Mengniu had warned it would have a net loss of 900 million yuan this financial year.