Asia acts to contain China's tainted milk
Japanese-brand cheesecake and cookies in Australia are among the latest products found to have melamine. Tests in China have revealed 31 more cases of contamination, the state news agency reported Wednesday.
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Given the size of China's domestic market and its export prowess, these scares, while alarming, may exaggerate the scale of the problem in comparison to other developing countries that also cut corners in production, says Toby Deforges, CEO of Engage, a strategic consultancy in Bangkok that has advised dairy producers in China.Skip to next paragraph
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Nor would new laws, as proposed by some experts, necessarily prevent a repeat, as long as unscrupulous producers know how to evade the rules. "The letter of the law in Asia is generally very strict.... [But] there's not much point in having strong legislation if you don't have strong policing that applies consistently across the industry," says Mr. Deforges.
China swiftly fired several government and company officials in the city where the contamination was discovered and vowed to overhaul its national controls on food. But many are skeptical, as similar promised crackdowns in the wake of previous cases failed to improve oversight, says Paul French, founder of Access Asia, a research consultancy in Shanghai.
For Chinese consumers, that should be a sign of reassurance, as foreign brands are seen as more stringent in following safety standards. But Fonterra opted to stay quiet after the contamination was discovered, says Mr. French.
Now middle-class Chinese are questioning the reliability of foreign-branded goods that are produced locally and sold at higher prices than Chinese products. "For those who can afford it, they're going to supermarkets and asking staff if products are 100 percent imported or a foreign name that's made here," he says.
For other multinational food companies, the latest wave of recalls is a stark reminder that underhand practices in poorly regulated markets like China can damage their brands, says Chris Bruton, director of Dataconsult, a consultancy in Bangkok.
Sourcing locally puts the onus on foreign companies to properly screen their suppliers, he says. "There's a premium on quality and if they overlook that quality they only have themselves to blame."
Since the scandal broke, there has been some confusion over tests by food inspectors that show traces of the chemical in products but don't necessarily indicate tainted milk supplies.
Authorities in Hong Kong said Tuesday that two samples of Cadbury chocolate produced in China contained tiny amounts of melamine but were fit for human consumption.
Singapore has sought to downplay fears over the risk of consuming three Chinese products it has recalled. On its website, the Agri-Food and Veterinary Authority estimated that a child could eat 23.5 pieces of White Rabbit Creamy Candy daily over a lifetime and still be within US recommendations for tolerable intake of melamine.