BEIJING, Sept. 25 (Xinhua) -- China's dairy market,
which was thrown into chaos by a scandal involving tainted baby milk formula, is
seeing encouraging signs of recovery in response to crisis management efforts.
Liu Xiuqin, a retiree in Beijing, bought a Yili brand
box containing 20 minibags of fresh milk for 28 yuan (some 4 U.S. dollars) at a
downtown Beijing Wal-Mart on Thursday afternoon. Shegot six soft bags for free.
"It is cheap and the store operators have put up a
placard above the stack saying the milk has tested free of melamine. I believe
they are safe and healthy," said Liu.
A man surnamed Cao in his 20s said he bought two
boxes of Mengniu brand, kiwi-fruit-flavor yogurt each containing four cups for
10.48 yuan on Saturday at a Beijing outlet of Carrefour, a French retailing
giant, and got two more boxes for free.
"People made a beeline for yogurt with a production
date of September 14," recalled Cao, who lives near the Temple of Heaven in
"When I read the apology written by Niu Gensheng, CEO
of Mengniu Dairy, over the scandal, I found him sincere in taking
responsibility, and I made the purchase to show my support and confidence in the
Both Yili and Mengniu were on the watch-list of 22
Chinese dairy companies whose products have sickened tens of thousands of
Yu Guoming, a professor in the School of Journalism
and Communication, Renmin University of China, said consumers' re-acceptance of
dairy products from domestic makers with tarnished images, such as Mengniu,
showcased the effect of crisis control.
¡¡¡¡START OF A SCANDAL
The tainted baby formula scandal was exposed on July
16 after 16 babies who were fed on milk made from powder produced by Hebei
Province-based Sanlu Group in northwest China's Gansu Province were found to
have developed kidney stones.
The exposure triggered a nationwide investigation.
The State Administration of Quality Supervision,
Inspection and Quarantine (AQSIQ) announced last Tuesday it had found the
chemical melamine in 69 batches of baby milk powder produced by 22companies
The agency issued a watch-list of the 22 companies
and their tainted products on the same day. The authorities ordered a halt to
the sale of the products, including the well-known brands of Sanlu, Mengniu,
Yili and Yashili, among others.
Melamine is used in plastics and other industries.
Experts say it is added illegally to raw milk to increase the apparent protein
The tainted milk is known to have killed at least
three babies and left 13,000 others hospitalized with kidney problems.
Major dairy companies responded quickly when the
scandal emerged, promising to be responsible for the aftermath.
Both Yili and Mengniu, two publicly-listed companies,
issued written apologies to consumers last Wednesday.
Yili said in a written apology that it had recalled
all the unsold contaminated baby formula for 3- to 6-year-olds after it was told
of the inspection result by AQSIQ on Tuesday.
Mengniu also promised in a written statement to take
back all types of contaminated baby formula, and added that it would bear all
the costs of doing so. Baby milk powder production lines were halted, and
changes in production would take place, said Mengniu in the written apology,
without specifying what those changes would be.
All the adulterated milk powder and dairy products
were ordered to be removed from shelves and destroyed
As of Tuesday, 7,074 tonnes of tainted dairy products
had been removed from retail outlets across China, the State Administration for
Industry and Commerce (SAIC) said. This included 4,246.7 tonnes of milk powder
and 1,562.1 tonnes of liquid milk products contaminated with melamine, SAIC
There were other repercussions for the industry, such
as investigations and assigning responsibility for the problem.
Seven government officials were sacked. They included
Li Changjiang, who was ousted from the post of GAQSIQ director on Sept. 22, and
Wu Xianguo, the Communist Party chief of Shijiazhuang City, the epicenter of the
Police in Hebei Province, the focal point of the
scandal, have arrested 18 people and detained 10 others. Six of those arrested
allegedly sold the melamine, while the remaining 12 were dealers suspected of
selling contaminated milk.
Tian Wenhua, 66, board chairwoman and general manager
of Sanlu Dairy, was detained by police for questioning after she was stripped of
titles including secretary of the Sanlu Group Committee of the Communist Party
of China and deputy to the local legislature.
In the meantime, 109 Chinese dairy companies and 207
distribution businesses on Tuesday issued a joint letter of commitment pledging
to guarantee good quality.
Many shops have taken steps to ease consumers'
At CenturyMart near the Shuangjing Flyover in
Beijing's Central Business District, grocery workers put up notices above
shelves fully packed with baby formula. One informs customers that Sanlu baby
formula produced before Aug. 6 was tainted and should be returned for a refund.
The other says bottles bearing some of the
watch-listed brands such as Yili have been tested and are melamine free.
At a grocery in Ganjiakou Mansion in western Beijing,
dairy products bearing some of the watch-listed brands including Yili and
Mengniu have green, red or yellow labels showing them also free of melamine.
"Once a reputation is damaged, it will take time to
rebuild trust, " said a saleswoman surnamed Gong. "Most people now buy other
brands they believe to have a better reputation, such as Sanyuan. Few people
will buy the watch-listed products, so the sales are low. We have to wait."
Crisis management is closely related to the brand and
credibility of an enterprise, but many Chinese enterprises have not developed
the capability to react properly when a crisis emerges, said Yu.
"One principle of crisis management is to take a
responsible attitude immediately and in a sincere manner, which is of great help
for enterprises to rebuild their credibility," Yu said.
Sanlu, the center of the scandal, provided a bad
example of crisis management. When it was first exposed, Sanlu refused to take
the blame and passed the buck to innocent dairy farmers, which ignited great
A further official investigation showed Sanlu had
lied about its contaminated baby formula for months while thousands of infants
got sick and at least three died.
Sanlu didn't openly admit its products were toxic
until Sept. 11. It eventually recalled baby formula manufactured on and before
The scandal led to the fall of chairwoman Tian and
the disappearance of all dairy products bearing the brand of Sanlu.
Answering a question on China's food safety at a
luncheon honoring his visit to the United Nations on Tuesday, Premier Wen Jiabao
said China needed to do everything possible to ensure the quality of products,
particularly the safety of food, and to tighten institution building, as well as
improve social ethics.
These, he said, were the three lessons China learned
from the milk scandal.