Chinese Official: 'Milk-Gathering System Was Out of Control'

NEWYou can now listen to Fox News articles!

China's agriculture minister acknowledged Tuesday that the country's milk-gathering system was "out of control" and led to abuses that put contaminated dairy products in stores across Asia, sickening nearly 53,000 babies and killing four.

The World Health Organization warned of possible smuggling of melamine-tainted infant formula across borders.

Melamine, used to make plastics and fertilizer, has been found in infant formula and other milk products from 22 Chinese dairy companies. Suppliers trying to cut costs are believed to have added it to watered-down milk because its high nitrogen content masks the resulting protein deficiency.

Since the discovery of tainted milk was made public, China's government has scrambled to respond. Recent days have seen a number of arrests and forced resignations of officials.

Chinese state television reported that the company at the center of the scandal, Sanlu Group Co., received complaints about tainted formula beginning last December and waited eight months to tell the local government, which then waited another month before informing higher authorities.

Agriculture Minister Sun Zhengcai told a meeting with the health and public security ministries that the industrial chemical melamine was likely added at stations that collect milk from small individual dairy farmers.

"Since milk stations began only in recent years, the country now has no specific method of supervising them, or clear-cut supervision department. The purchasing process of raw milk is basically out of control," Sun said, according to a summary of his comments posted Tuesday on his ministry's Web site.

"We must crack down on them with the greatest determination and the toughest measures," Sun said in the meeting held late Monday.

Sanlu had no comment Tuesday about the allegations on state television.

China Central Television reported Monday night that an investigation by the State Council, China's Cabinet, found that Sanlu had been receiving complaints about its infant formula as early as December 2007. The dairy company discovered melamine in its milk powder in June but did not report it to city officials until Aug. 2, it said.

"During these eight months, the company did not inform the government and did not take proper measures, therefore making the situation worse," CCTV said.

The Shijiazhuang city government then failed to report the case to the Hebei provincial government until Sept. 9, CCTV said. Sanlu products were recalled from stores two days later and Shijiazhuang's top Communist Party official fired.

Anthony Hazzard, the Western Pacific director of the World Health Organization, said 82 percent of the children made sick by the formula were 2 years old or younger.

Hazzard said countries had been advised to focus particularly on smuggled formula by the International Food Safety Authorities (INFOSAN), a network of 167 countries organized by the WHO and the Food and Agriculture Organization.

He said authorities do not know at this stage what countries may have received the contaminated products.

"I think the greatest fear is if there has been illegal movement of the heavily contaminated products rather than the legal movement of products that may have very low levels of melamine," said Hazzard, speaking in Manila where the WHO's regional headquarters is located.

The head of the Chinese agency that monitors food and product safety stepped down Monday. The resignation of Li Changjiang, who headed the General Administration of Quality Supervision, Inspection and Quarantine since 2001, comes a year after he and the government promised to overhaul the system in response to a series of product safety scares.

New regulations and procedures were introduced in an attempt to restore consumer confidence and preserve export markets after a string of recalls involving tainted toothpaste, faulty tires, contaminated seafood and in March 2007, pet food containing melamine that was blamed for the deaths of dogs and cats in the United States.

According to the Health Ministry, of the 53,000 sickened children, 12,892 remain hospitalized, with 104 in serious condition. Another 39,965 children were treated and released.

Baby formula and other milk products have been pulled from stores around the country and Chinese dairy products have been recalled or banned in Japan, Singapore, Brunei, Malaysia and Hong Kong.

Four Hong Kong children have been reported with kidney stones.

One of China's biggest milk producers, China Mengniu Dairy Co., saw its stock price plummet slightly more than 60 percent in Hong Kong trading Tuesday after its products were found tainted with the industrial chemical melamine.

Mengniu, China's No. 1 dairy producer in total volume, said only a small portion of its products were contaminated and blamed the contamination on "the illegal acts of some irresponsible milk collection centers and raw milk dealers."

"The board wishes to sincerely apologize for the incident and any inconvenience caused to the public," the company said in a statement to the Hong Kong stock exchange.