Whenever there is a big food safety scandal, two things happen. Companies start calling us asking if we can protect them from such problems (we can improve their odds but nothing is guaranteed) and the press starts calling us with questions as to what went wrong.
First with the press. Bloomberg news is out with a story, entitled, “China Says 432 Infants Have Kidney Stones From Sanlu Formula,” quoting CLB’s own Steve Dickinson on this latest China food scandal:

The problem may stem from cost pressures combined with government price-caps, according to Steve Dickinson, a partner at law firm Harris Bricken who has studied China’s food safety system. The Chinese government has limited price increases of staple goods, including milk products, this year to reduce the impact of inflation on consumers.
“These companies aren’t really permitted to price their products at a commercially reasonable price,” Dickinson said in a telephone interview from the eastern Chinese city of Qingdao. “Yet their superiors are beating on them to make money. Melamine allows them to get higher-rated protein content at no extra cost.”
Food Safety Efforts
Dickinson added that so far, the central government’s efforts to improve food safety haven’t filtered down to the local level. “They haven’t found a way to make it work,” he said.

For more on how to handle China quality issues (and in the spirit of “here we go again), check out the following posts we have done on this issue:
— “China Products: Ya Want Quality? I Got Quality.
— “China Quality Control: Darkness Before The Dawn.
— “Quality Control Direct From The China Factory.
— “China Products: Forget Trust, Just Verify.
— “China Product Outsourcing Done Right: A Sort Of Guide.
— “China Product Problems: What’s Morality Got To Do With It?

  • William

    Argh! Price controls rear their ugly head again. How many products are under similar controls?

  • Dan,
    Here we go again is right. What we are about to experience is more reporting out of context.
    If this was systemic, it would be more than 1500 children (there are 60 million under the age of 4). To date, it appears to be a single company, not thousands of companies as a systemic problem would be in the dairy industry.
    We are talking about a single producer, or a small coalition of producers that pool their milk and the provide to Sanlu.
    Surely progress can be made in the testing and reporting, but let’s keep this in perspective and not draw wide “China” conclusions until they are merited.
    We have one producer (to date) who acted in the worst manner of greed and a company that did not have a system in place to keep the bad raw material from entering the system… that is not a China problem.
    If you would like to speak about systematic food problems though, be sure to include the multiple beef patty recalls in the last 2 summers.. the spinach recall.. and the jalapeno/ tomato recall from earlier this summer.. those were systemic issues

  • Dan

    One year ago, I would probably have agreed with you. But since then, I have talked with someone near the top of the US Consumer Protection Agency who told me I was flat out wrong to think that China’s quality control problems were proportionally no worse than other emerging market countries. This person told me that China’s rate of quality issues passing through the US CPA was about 4 times worse that of any other country on a per import basis. Since then, I have asked about 25 companies who have manufactured in places like the Philippines, Vietnam, Bangladesh, Turkey, and Mexico, how China ranks in terms of quality controls with the other countries in which they have manufactured, and without exception, they have all said China is the worst. All of these companies are quite experienced. The scary thing I have found (and sometimes with my own clients) is that sometimes you can do virtually everything economically possible to prevent quality control problems, but then they happen anyway. I don’t know how you can state that there was no “system in place” here. I would bet there was a system in place, but like all systems, it was not perfect, and it was just not good enough to block those who are hell-bent on circumventing it.

  • Just read a report that of 109 surveys completed, 20% show signs of Melalmine.
    Sanlu tested positive on all 11 batches tested under their brand. Definitely a sign that they have a systemic problem.
    So, I will correct what I wrote above by saying that the problem is certainly getting more serious as they dig further, and I would expect this to become a larger issue where the public pressure grows.

  • bill

    Chinese media now reporting melamine found not only in Sanlu products, but 22 brands altogether.

  • James G

    Would you say that Chinese companies seeking to import goods to the US are generally reaching for (if not adhering to) a higher standard than domestic companies? I mean, since they want to get their goods into the U.S.
    If so, reading your remark that 25 prominent companies cite China as being much, much worse than other “emerging” (hate the term, even as an alternative to the clunky “developing, but it fits here) nations, would that mean that companies that produce for the Chinese domestic market have terrifying QC?
    What becomes of all the recalled products? Are they always destroyed, or do some find their way to places with way low standards?

  • barbara dimartini

    My daughter is in south america and needs to buy baby formula for her 4 month old baby. There are 2 formulas available. Similac Advanced made in Ireland and Enfamil Premium made in mexico.
    Does anyone have information about the safety and source of the milk to make these formulas?
    All formulas distributed in the United States by these two companies are made in USA, but these companies evidently do not distribute the american made formulas to other countries.

  • Lorne Newton

    My wife and I adopted our daughter from China in 2004. Of course we will never know whether she was fed melamine contaminated formula during her first 14 months in an orphanage. We can only pray that she never was fed tainted formula, and secondly, if she was, that she never develops health related problems. All I can say is what a tragedy

  • Joy

    Dear Barbara,
    I doubt the orphanage will have fed your adopted daughter any high-quality milk imported or domestically made by foreign companies such as Mead-Johnson. You may want to take her to do a urine test and ultrasound to see if she has any kidney stone.

  • Coamrooky

    The response level to local and national disasters is great but it’s a damn shame that so many citizens take advantage of the sad situations.
    I mean everytime there is an earthquake, a flood, an oil spill – there’s always a group of heartless people who rip off tax payers.
    This is in response to reading that 4 of Oprah Winfreys “angels” got busted ripping off the system. Shame on them!