Wednesday, October 01, 2008


As more and more countries worldwide institute total bans on any products containing milk byproducts from China the Canadian and American governments continue to "hold the line" by only calling for recalls on a limited range of products. As Molly has mentioned before on this blog, this is very reminiscent of the actions of the Chinese government in delaying action on the scandal because of the Olympics. In Canada and the USA the reasons are very much elections rather than Olympics. This is especially true in Canada where there is already an ongoing food contamination problem in the listeriosis outbreak, where there are plans afoot to further decrease food inspection and where the Minister in charge has been essentially gagged so that he cannot put his foot in his mouth in the coming two weeks. Sneaky Stevie Harper is nothing if not a master of the idea of "staying on message".

Two more countries that have banned all products containing Chinese milk byproducts in recent days include the Democratic Republic of the Congo and, most importantly, yesterday Russia according to a report by the Russian Novosti News Agency. This should be seen as significant as the country of my mother's birth is hardly famed for decisive action for protection of its citizens in the case of consumer goods. If nothing else the Canadian and American governments should be shamed into action by the fact that even Russia takes the matter more seriously than they do.
Meanwhile the list of high profile "western" brands implicated in the scandal grows by the day. In addition to the Starbucks, Nestlé, and Heinz companies Pizza Hut in Taiwan (in relation to its cheese) , Oreo cookies from Kraft Foods and M&Ms and Snickers from Mars in Indonesia have now come under a cloud of suspicion, according to an article in the Asian News. The reaction of Kraft and Mars has been less than sterling as they disputed the Indonesian findings, claiming that the products in question are "counterfeit". We'll see. We'll see. Denial was an early feature of many companies eventually implicated in the contaminated pet food scandal last year.
The same article also mentions that the British Cadbury Company has withdrawn 11 of its products produced in China and distributed in Taiwan, Hong Kong and Australia. The article also notes the massive size of imports to both the EU and the USA of sweets ,in the case of the EU, and the milk "protein" (maybe) in the case of the USA in the past year. In the EU, according to an article in the VOA News melamine has been found in cookies marketed under the Koala brand. This article also mentions that melamine was found in Ritz Crackers manufactured by the Nabisco Company in South Korea.
According to yet another article in the Christian Science Monitor Lipton's milk tea has had to be pulled from shelves across Asia. Add Lipton's to the list. The article also notes a couple of interesting facts. One is "strong laws" cannot solve the continuing problem of food adulteration in China (or in many other countries such as the USA and Canada) because the "policing" aspect of such laws is missing. China is actually very "strict" in terms of its laws, and execution would be a probable fate of any arrested executive found implicated in this most recent scandal. Yet stern penalties hardly deter opportunists when the chance of "getting caught" are minimal given the state of inspections in that country, a situation that conservatives in both the USA and Canada see as an admirable situation. The second point is that the company most deeply implicated in the problem in China, Sanlu, is actually a joint venture with the New Zealand Fonterra (mentioned before on this blog) and the Chinese state itself. Yup, this problem developed in a situation where the government itself was the major stakeholder. Interesting ! According to an article in the New York Times over 200,000 children have been brought in for examination in the Chinese province of Hubei alone. the Chinese government has not issued any updates about the number actually affected since last week.
Meanwhile back in the USA the Department of Health has responded by finally promising to press for more stringent 'country of origin" labelling , according to an article at the ABS-CNN News. this comes in the wake of the American ban on milk imports from China (a basically nonexistent item) while not addressing the much more prevalent problem of "milk byproducts".Wait a minute here, for those with a memory. Weren't such "requirements" part of the "lessons learned" to be implemented from last year's pet food scandal ???? Love those promises ! Let's see what happens with the latest vows.
If you want to follow this story as it develops Molly can recommend the following blogs:
1)From a scientific point of view the Science Base blog.
2)For the political and "scandal" aspects (and practical recommendations) the Daily Kos blog.
The material on this matter is starting to accumulate in a pile beside Molly's desk. Last year during the pet food scandal the pile of printouts reached about 1.5 foot high in a box . Molly suspects that this matter may exceed that amount when all is said and done.
Meanwhile, here is yet another view from the IUF website, properly referenced this time for those with touchy feelings, on the role of New Zealand's Fonterra Group in these events.
Fonterra and the China milk scandal - too many unanswered questions:
State media in China first began reporting about babies falling ill from milk formula on September 11, after one baby had died from kidney stones in Gansu province. The first reports spoke of "an unknown number of infants in at least seven provinces and regions suffering from kidney stones after drinking milk formula marked San Lu".
San Lu is the joint venture partner of New-Zealand-based dairy giant Fonterra Co-operative Group.
The following day, as Chinese authorities revealed that the chemical compound melamine had been found in samples of baby milk powders, Chinese media reported that the San Lu Group had issued an immediate recall of milk formula made before August 6. The only comment that could be drawn from Fonterra was, "We understand that the product involved is only sold in China."
On September 15, as the Chinese media reported a second death from melamine-laced milk powder, the New Zealand Prime Minister announced that it was her government that had blown the whistle on the tainted milk scandal and set off the recall following the failed attempt by Fonterra to have its joint venture partner's products removed from sale.
That same day, Fonterra issued a statement which was stunningly ambiguous and evasive. They revealed that they had been advised of the contamination of baby formula at a San Lu Board meeting which had taken place on August 2! The statement goes on to say that they "pushed hard" for San Lu to recall the formula and that San Lu "immediately implemented a trade recall of infant formula" followed by "a full public recall of all infant formula". However, this "immediate recall" didn't happen until September 12 - 5 days after the New Zealand government alerted the Chinese government after having been alerted by Fonterra 3 days before.
What was Fonterra doing between August 2 and September 5, when it took the step to inform the New Zealand government?
At a media conference on September 24 to announce its 2007/08 results and cash distribution to farmer-shareholders, Fonterra management offered an answer to explain its scandalous omission: "We firmly felt the most effective way to get the product off the shelves and away from consumers was to work within the Chinese system".
But did it take one month for Fonterra to realize that working within the Chinese system wasn't working? The long history of official complicity and complacency in the face of food contamination scandals in China should have been taken as a call to immediate action.
Amazingly, company management continues to contend they had done all they possibly could during this period, and are now trying to relativize their responsibility by calling San Lu's handling of the melamine scandal "appalling" and accusing them of having attempted to cover up the contamination since December 2007.
Fonterra's own handling of the crisis can only be called a cover up - not only of the contamination scandal, but of its own negligence. Why was Fonterra not aware that San Lu had been receiving complaints about contaminated milk powder since December 2007? The answer might be found in the company's own admission that only one of its 3 directors on the Board of San Lu is a Mandarin speaker. Unofficial websites had been asking questions about tainted milk powder from San Lu for months. Why was Fonterra not monitoring these blogs about food safety? Why did Fonterra fail to put people and systems in place to ensure standards and product safety? Why did it fail to put any efforts into securing the safety of the supply chain?
It is clear that working within the Chinese system has not brought the hoped-for results. Four babies have died and some 50,000 more are ill from adulterated milk powder; Fonterra has taken an impairment charge of the equivalent of USD 95 million to cover the cost of the product recall and loss in San Lu's brand value; and Fonterra's own goodwill has been damaged as the public continues to ask how the company could possibly have let this scandal for so long without publicly sounding the alarm.
Fonterra have talked about the tragedy of the deaths and the thousands seriously ill. They have talked about damage to the brand and loss to their investment. What they have not talked about is that their negligence in China and damage to their reputation puts jobs and livelihoods at risk, including in New Zealand where their products represent 25% of export revenue.

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