September 19, 2008, 6.40 pm (Singapore time)

EU wants explanation of widening China milk scandal

* EU calls for full disclosure
* Starbucks recalls milk in China stores
* China agency finds 10% of samples contaminated
* Dairy company executives vow clean-up

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BEIJING - The European Union wants an explanation of a Chinese dairy scandal that has made thousands of infants ill, an official said on Friday, after the scare spread to milk in cartons and Starbucks dumped a supplier in China.

A government food quality watchdog said nearly 10 per cent of milk and drinking yoghurt samples from three major dairy companies were contaminated with potentially deadly melamine.

Panicked parents have crowded hospitals and demanded redress since officials and the Sanlu Group, China's biggest maker of infant milk powder, said last week that babies were sick with kidney stones and complications after drinking toxic milk powder.

At the latest count, 6,244 children have become ill. Four have died and 158 are suffering 'acute kidney failure'.

Robert Madelin, director-general for health and consumer protection at the European Commission, said the European Union did not import Chinese infant milk powder and there had been no EU reports of illness from other imported Chinese dairy products.

But with foreign consumers watching China again struggle with toxic food and claims of delays and cover-ups, Mr Madelin told reporters in Beijing he expected an account of what went wrong.

'We are trying to establish the facts. We are discussing all aspects of this crisis bilaterally with our colleagues in China,' Mr Madelin said.

'On the governance aspects, we are also asking questions, and we will learn the truth probably about the same time you do.'

After a nationwide check, China's General Administration of Quality Supervision, Inspection and Quarantine named two of China's top dairy producers, Xinhua news agency has reported.

Almost one-tenth of liquid milk and yoghurt batches from Mengniu Dairy and Inner Mongolia Yili Industrial Group Co Ltd contained melamine, which is banned in food.

Several samples of milk from the Bright dairy group also had the substance.

Used in making plastics, melamine is rich in nitrogen, an element often used to measure protein levels. By adding melamine to watered-down milk, dealers can fool quality checks.

Starbucks
Starbucks Corp said its 300-plus cafes in mainland China had pulled milk supplied by Mengniu. Starbucks said no employees or customers had fallen ill from the milk.

Yili, a Beijing Olympic Games sponsor, already faced a recall in Hong Kong, where authorities found eight of its 30 products, including ice-cream and yoghurt ice bars, contained melamine.

In Singapore, the government food watchdog advised retailers to pull Yili yoghurt ice bars from their shelves.

Mengniu and Yili apologised to shaken consumers and investors and vowed to recall and destroy problem products.

'Anyone who must step down will step down, anyone who must bear legal responsibility will bear legal responsibility,' Yao Tongshan, Mengniu executive director and chief financial officer, told reporters in Hong Kong, where the company is listed.

Quality officials stressed that most Chinese milk was safe, trying to shore up public trust already shaken by a litany of food scares involving eggs, pork and seafood in recent years.

The Chinese quality watchdog also said melamine-tainted milk would not make adults sick unless they drank more than two litres a day. But consumers sounded far from reassured.

'I'm pretty worried. In the future I will certainly trust the milk industry less,' said Zhang Xi, a 25-year-old engineer, sitting at a Starbucks outlet in Beijing.

China launched reforms to clean up food and product safety after a wave of scandals last year, including melamine found in pet food ingredients sent to the United States.

Now it is again vowing to punish errant businesses and officials and there have already been dismissals, detentions and arrests linked to Sanlu, 43 per cent owned by New Zealand dairy giant Fonterra.

But Chinese media have mostly kept quiet about claims that Sanlu and officials in Shijiazhuang, where the company is based, concealed the poisonings from the public and senior authorities during the Beijing Olympics in August.

New Zealand Prime Minister Helen Clark said on Monday that Chinese officials acted last week only after her government pressed Beijing.

China's dairy industry will need more than a blitz of inspections and detentions to cure it, said Guan Anping, a former trade official and now a lawyer who has dealt with the industry.

'Scattered milk farmers have been at the mercy of milk thugs, local strongmen who control prices and get away with putting all sorts of things in milk to maximise their profits,' Mr Guan said.

Police seized 222 kg of melamine and arrested 12 people on Thursday, bringing the total detained in the scandal to 18. -- REUTERS