October 25, 2010

Mengniu apologises over Yili's milk rumour

Mengniu Dairy, one of China's top dairy firms apologised on Friday (Oct 22) after a member of staff made up claims that the products of its competitor - Yili contained an ingredient that was harmful to babies.

Early this week, Yili, a major rival of Mengniu based in the northern region of Inner Mongolia, issued a statement saying An Yong, a Mengiu employee, and three employees of a public relations agency had been arrested for spreading rumours about its products.

The four were involved in making claims online that one of Yili's milk products contained deep sea fish oil, which had an ingredient that allegedly could cause sexual precocity among children, according to state media.

Earlier, Mengniu issued a statement denying it was responsible for spreading rumours that a baby formula made by Synutra, a dairy producer based in Beijing, caused infant girls to grow breasts.

State health ministry said in August an investigation had found no evidence that milk powder produced by Synutra caused the premature development of the babies.

China's dairy industry is prone to health scandals.

In 2008, Chinese dairy products were recalled worldwide after it was found that melamine, which is used to make plastics, was widely and illegally added to the products to give the appearance of higher protein.

Melamine was found in the products of 22 Chinese dairy companies - including Synutra, Yili and Mengniu - in a massive scandal blamed for the deaths of at least six infants and for sickening 300,000 others in China.

The government has ordered buyers of the chemical to register their names after authorities earlier this year found 25,000 tonnes of milk powder was again tainted with melamine.