Most Read Contributor in Australia, September 2016
As the Chinese public's mistrust in its country's dairy
industry continues following a number of milk contamination scares
(most notably the 2008 Sanlu tainted milk scandal), a number of
Chinese ministries (including the Food and Drug Administration)
recently released measures to improve food safety and consumer
Milk sources were blamed as the main reason for the Sanlu
scandal (milk and infant formula was adulterated with melamine to
make protein content appear higher resulting in the deaths of 6
Chinese infants with at least 300,000 others falling ill) and one
of the new measures is to require all companies that produce baby
formula to own their own dairy farms in an attempt to ensure that
quality standards are met and to improve traceability of product
(and implicitly accountability for contamination). Other
adopting stricter management standards to supervise the baby
requiring all foreign producers of baby formula to be verified
and registered; and
prohibiting companies from outsourcing baby formula
Teng Jiacai, the deputy head of China's Food and Drug
Administration, recently said that "a quality gap in the
source of dairy does exist between Chinese and foreign baby formula
products" and that the expiry this year of the licences of all
of the country's dairy product producers was an ideal
opportunity for Chinese authorities to "carry out a strict
assessment of manufacturers and eliminate those that fail to meet
the national standards".
China's most recent scandal involved a milk powder brand
being marketed as being imported from New Zealand which later
turned out to be false.
It has been estimated that approximately 70% of all Chinese
mothers feed their babies with baby formula, rather than breast
milk, and as confidence in domestic milk producers has tumbled,
consumers have turned to foreign producers (sales of foreign brand
milk in some large Chinese cities have been reported to top 85% of
Significantly, the convergence of both food safety and food
security concerns has been a significant factor contributing to
continuing investment into dairy in Oceania such as the CN¥1.1b
(approximately A$191m) investment by Hong Kong-listed Yashili
International Holdings (the subject of a proposed 75% acquisition
by China Mengnui Dairy, which is 19% owned by China's
state-backed agricultural and food industry supplier, COFCO) to
open an infant formula factory in the Waikato, New Zealand.
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Liability was apportioned between the VMO, Dr.Brown, and the hospital on an 80/20 basis in favour of the hospital.
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