China manufacturing

Most of you probably already know more about melamine than you ever expected. Melamine refers to both a chemical and to a resin produced from it. Human ingestion of melamine “may lead to reproductive damage, or bladder or kidney stones, which can lead to bladder cancer.” Unfortunately, its high nitrogen content allows it to mimic protein and that characteristic has led to Chinese companies putting it into feedstock as an extremely cheap way of falsely boosting its protein content readings.

Here we go again, and this time it is hitting very close to home.

The Los Angeles Times just came out with a story, Toxic melamine is suspected in seafood from China, on how melamine is being used in China to boost the protein content readings in feedstock being given to seafood. I say close to home on this for two reasons. One, my law firm has a number of clients are in the seafood industry or a related industry. One of our first big China litigation matters was seizing/arresting seafood in Dalian and Qingdao.

Two, Seafood is a shockingly international business. A few years ago, my law firm was retained by the National Fisheries Institute (NFI) to represent foreign fish importers before the 9th Circuit Court of Appeals and the Supreme Court. I remember from that brief that more than 80% of the seafood in the United States is imported and I would bet that percent is even higher now. “By volume, China is the largest exporter of seafood to the U.S., and the second largest in terms of monetary value. In particular, China exports significant amounts of shrimp and catfish products, which represent two of the ten most consumed seafood products in the U.S.” (April 25, 2008, Statement of the FDA’s Don Kraemer, before the U.S.-China Economic and Security Review Commission Hearing on Chinese Seafood: Safety and Trade Issues).

The Los Angeles Times article starts out with the massive (and ever growing) numbers involved:

China is the world’s largest producer of farm-raised seafood, exporting billions of dollars worth of shrimp, catfish, tilapia, salmon and other fish. The U.S. imported about $2 billion of seafood products from China in 2007, almost double the volume of four years earlier, according to the U.S. Department of Agriculture.

It then hits us with a critical string of bad news. Melamine is widely believed to go into feedstock for seafood in China, Melamine “can lead to urinary problems such as kidney stones and even renal failure,” and, “unlike in cows and pigs, the edible flesh in fish that have been fed melamine contains residues of the nitrogen-rich substance.”

The article then quotes a Burbank, California fish purchasing manager:

Brian Dedmon, purchasing manager for “China’s a big place, and it does a lot of processing, and cheaply too,” said Brian Dedmon, purchasing manager for the Fish King distribution plant in Burbank.

Fish King, which supplies hundreds of Southern California restaurants and has a store in Glendale, says it buys processed snow crab meat, squid and other seafood from China to meet market demand and because the price is competitive. Dedmon says the company relies on government inspections, its importers and its own experience to ensure the fish it buys is safe.

“We’re definitely concerned about melamine, but by the time the fish gets to us, health issues should’ve been taken care of by the government agencies and brokers that we go through,” he said.

I find this quote very interesting for many reasons. First, about a year ago, when I was interviewed by various publications regarding Chinese food safety, I was asked if any of my food importing clients would speak with the interviewer. Not a single one would. I particularly wanted one client to speak with the media to talk about how it was so conscious of food quality it had cameras recording every single food item that went into its boxes in China. Even this company would not talk, believing that no matter how much it touted its safety record and safety procedures, the only thing people would take away from the article was that it imported food from China.

I suspect Dedmon talked here because (at least as far as I know) snow crab meat and squid are not farm raised in China, rather, they are merely processed there. As such, those seafood items would almost certainly not pick up any melamine in China.

China Law Blog’s own Steve Dickinson brings a bit of his own gloom and doom to the article:

In the U.S., commercial fish farms have to use feed from a handful of approved suppliers, but in China, there may be hundreds of thousands of sources for feed, said Steve Dickinson, an American attorney in China’s coastal city of Qingdao who ran a salmon-farming business in Washington state.

Melamine has “infected the whole system in China,” he said.

Even some Chinese feed suppliers are no longer denying the commonality of melamine spiking:

More than 15 feed suppliers in various parts of China were contacted for this story. Most of them declined to comment or said they didn’t add melamine. But some of them said the practice of spiking feed with it had been going on for at least the last six years, with inspectors checking some types of feed products more tightly than others.

The US FDA is not yet testing for melamine in seafood and it seems most private testing outfits do not do so either.

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:

The biggest problem with melamine, however, is that it is so damn difficult to spot.

What are you doing to ensure quality products from China? I would particularly love to hear from people involved in the Chinese food business.

Print:
EmailTweetLikeLinkedIn
Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.