December 22, 2008

China's dairy giants, Mengniu and Yili, have promised on Thursday (Dec 18) to uphold business ethics and provide safe products, as part of a national campaign to regain consumer confidence in the aftermath of the tainted milk scandal.

The scandal, which sent Mengniu's sales to crash 96 percent, has severely damaged consumer confidence both domestically and overseas.

Mengniu and Yili employees and representatives swore on Thursday (Dec 18) to improve management, take strict quality control of raw milk and take full responsibility for each step in providing their products.

Mengniu and Yili said quality checks have strengthened since the scandal, and Mengniu has installed special melamine-testing equipment and conducted research on other potentially harmful chemicals.

Yao Haitao, vice president of Mengniu, has urged the government to do more to regulate farmers and milk stations.

Yao said while they have taken control of milk stations to ensure product safety, the power of a company is limited. Yao added that he hopes the society and government will join in the effort to crack down on illegal activities.

Mengniu has hired 10,000 consumers to help inspect the production process, while Yili plans to invest more than RMB500 million in 2008 and 2009 before taking full control of milk collection by 2010.

Mengniu and Yili said the key to improving raw milk quality is the development of large-scale dairy farms.

Yao said Mengniu plans to build 20 new modern farms, each with more than 10,000 cows in the next few years. The company currently has seven such farms.

Milk products made by Sanlu, Yili and Mengniu, along with many other leading Chinese brands, were found to contain melamine in December. The tainted milk was said to have killed at least six babies in China, while inflicting another 294,000 babies with kidney-related problems.