A factory manager in east China has been arrested for using grease from swill, sewage, pesticides and recycled industrial oil to make lard for human consumption, state media said Monday in the country's latest food scare.

Ying Fuming, a manager at the Fanchang Grease Factory in Taizhou, a city in Zhejiang province, sold the lard at half the price of other wholesalers while promising that his product met safety standards, the Shanghai Daily said.

The factory was shut down and local health and food authorities began an investigation this year after an anonymous tip indicated that the plant "recycled large amounts of used grease to process substandard lard," the newspaper said.

It is the latest incident involving substandard or fake food products in China, where there is rampant counterfeiting of food and medicines.

China's food safety watchdog announced last month that seven companies that produced salted, red-yolk duck eggs used potentially cancer-causing red dyes.

In 2004, at least 12 infants died from malnutrition after drinking phony formula in a city in the eastern province of Anhui. More than 200 babies suffered wasted limbs and swollen heads — common symptoms of malnutrition.

The Taizhou factory, which opened in September 2005, was ordered shut down but continued operating at night, the Shanghai Daily said. It sold its product to retailers across the country, who sold it to clients, including hotels and restaurants, it said.

In a recent night raid, officers found 83,000 pounds of raw materials and 11,600 pounds of lard, the newspaper said without providing any more details.

"Some was recycled edible grease, such as oil refined from swill and cooked oil," it said. "Some was grease rendered from sewage, and some was recycled industrial grease."

By law, only pure fat from hogs can be used to produce edible lard, the newspaper said.

Samples from the Fanchang factory showed an acid value more than 11 times higher than the national limit, it said.