China's Sanlu Milk May Not Survive 'Tainted Milk' Controversy

Wellington, New Zealand (AHN) - The New Zealand partner of Chinese Sanlu milk brand, the company at the center of China's industrial chemical melamine-contaminated baby milk formula scandal, said the brand will not recover from its current problems.

Fonterra chief executive Andrew Ferrier announced on Wednesday they have reduced its stake in Sanlu because they believe the Chinese milk company cannot survive from the damages, much less remain intact.

He told reporters in New Zealand, "Sanlu has been damaged very badly by this tragedy. The [Sanlu] brand cannot be reconstructed. And added he "can't see clearly at this point" whether Sanlu group "will stay intact."

He noted melamine contamination "is in dairy products across the whole country," with 22 Chinese companies caught up in the scandal.

Over 50,000 children in China have fallen ill while four infants have died since the scandal erupted that Chinese-made infant milk formula was contaminated with melamine, an industrial chemical used in the manufacture of plastics.

Subsequent tests on the milk products showed the contamination include liquid milk, yogurt, chocolates, candies and other dairy products.

Countries from across the globe, mostly in Asia, has since recalled or banned dairy products from China.

On Wednesday, the Indonesian government has ordered food retailers to pull 28 products from their shelves because they may contain tainted Chinese milk.

Tien Gartini, director of Inspection and Certification of Food Products, said the list - including Oreo cookies and M&M chocolate candies - is based on its registry of products containing milk ingredients, however, Oreo and M&M officials said they hadn't used any of the tainted Chinese milk in their products.

Ferrier adds the Chinese government took control of Sanlu and shut down its operations.