China's dairy industry seeks government aid

China's dairy industry is seeking government aid as it struggles to recover from last year's crippling tainted milk scandal that killed at least six babies, according to state media.

Dairy companies have 250,000 tonnes of milk powder in stock that cannot sell even though prices have dropped sharply, due to lingering safety fears and an economic slump.

The China Dairy Industry Association had petitioned the government for help, and it involved a request to buy one-third of the excess milk powder, which could then be given to people affected by natural disasters or those in orphanages and homes for the elderly, said Wang Weimin, a top official with the Dairy Industry Development Association of West China.

Before last year's scandal, dairy firms had no excess milk powder.

Many parents remain reluctant to buy Chinese milk powder even after authorities declared it safe, and the situation was worsened by an influx of cheap imported milk powder that many consumers now prefer because it is thought to be safer, said China Daily.