December 29, 2008

China's dairy firms to pay damages to melamine victims

Chinese dairy firms that sold melamine-tainted milk will pay compensation to the families of nearly 300,000 affected children, according to the state media.

The 22 dairy producers will make one-off cash payments to the families, said the China Dairy Industry Association.

Sanlu Group, the company at the centre of the scandal, has declared bankruptcy but will still make the payments, said Xinhua news agency.

The dairy companies offered to shoulder the compensation liability in an effort to regain consumer confidence, and a fund will be created to cover the victims' potential future medical bills resulting from their consumption of the tainted milk, according to Xinhua. 

China's authorities said at least six children died and around 294,000 were sickened after consuming tainted milk. The scandal affected world confidence in China's food products, leading to recalls of China's dairy products worldwide.