September 28, 2008

Tainted Milk Recall Widens To Include Some Snack Foods

The list of products facing recall due to potential contamination with the chemical melamine grew larger Friday with the inclusion of many processed foods that contain milk and protein, such as chocolate and other snack foods.  

Food companies throughout the world are now rapidly assessing their products and establishing strategies to prevent potential problems.

"We have to think about any processed food with milk or protein in it," James Rice, China country manager for Tyson Foods Inc., the largest meat processor in the world, told the AP.

Although Tyson is not affected, for other companies "that includes biscuits, cake mix, energy bars, anything that should have protein in it," Rice said.

Many food companies, already having learned the hard way the importance of food safety diligence in China, have already undertaken special precautions before Chinese milk suppliers were found to be adding melamine to watered-down milk to increase its perceived protein content.

The tainted dairy products have already sickened 54,000 children.

The chemical melamine, high in nitrogen, can often "trick" tests that verify protein levels in various foods.   

The latest recall follows a spate of scandals last year involving Chinese made products, including melamine-laced pet food ingredients.

However, many companies continued to disregard the risks, said Jeremy Haft, who oversees factories in China in a variety of industries, including medical products.

"I don't think much was learned from the recalls of a year ago," said Hath, who authored a book of his experiences entitled "All the Tea in China."

Major food maker Lotte Group saw its popular chocolate-filled Koala cookies recalled in Hong Kong and Macau on Friday due to melamine contamination. Cookies made by the Tokyo-based firm, still on sale in Shanghai, list whole milk powder as an ingredient.

"We will look deeply into all the details of the manufacturing process," said Kayh Kim, manager of Lotte China Food's planning department in Beijing.

"We really don't want to lose our customers' confidence," he told the AP.

A Lotte spokeswoman said the products sold in Japan are not made with Chinese dairy ingredients.

Another firm, the Shanghai-based maker of the popular vanilla-flavored toffee White Rabbit, said it had halted domestic sales after the Hong Kong government's Center for Food Safety reported that the treat contained more than six times the legal limit of melamine.  The announcement followed White Rabbit recalls in Australia, Britain, Singapore and New Zealand.

Kraft Foods Inc. rushed to assure customers that none of its Oreo-brand products contained the Chinese milk powder after rumors of melamine-related recalls of Oreos and other snacks spread on the Internet and by phone text messages earlier this week.

Although Oreo fillings contain no milk, Oreo's with icing on them contain milk powder from Australia, Kraft said.

"Regardless of where they are produced, Kraft products are always held to the highest quality and safety standards."

Experts say that many foreign brand food makers rely on local Chinese partners as they expand their operations into the nation.

Fonterra, New Zealand's dairy cooperative, learned of the implications when Sanlu Group Co., its local partner, failed to act quickly amid reports that babies drinking its infant formula were developing kidney stones.

"The problem was that Fonterra, right from the start, had no control over what was going on," Bruce McLaughlin, head of Sinogie Consulting in Shanghai, which conducts market research, told the AP.

"The most important thing is that if you're going to make an investment and have your name tied up with it, you have to have control over what's going on," he said.

For some companies, that may mean going without local partners.

Swiss chocolate maker Barry Callebaut, the world's leading producer of cocoa, chocolate and confectionary products, established its own factory west of Shanghai earlier this year, with quality control staff reporting directly to the company's CEO.  The factory tests milk products from all local suppliers, and sets aside any from domestic sources until it is confirmed safe, according to Gaby Tschofen, the company's vice president for corporate communications.

Japanese beer maker Asahi Breweries Ltd. decided to set up its own dairy farm in China, a decision that is proving is proving wise as the company's milk, which began selling just this month, is flying off the shelves amid the melamine scare.

Asahi Green Source Farm, a venture with Japanese companies Sumitomo Corp., and Itochu Corp., is stocked with more than 1,000 dairy cows from Australia and New Zealand.

"We already realized the importance of the source of raw milk, since it's easy for trouble to crop up in a booming market, and we have made every effort to control the manufacturing process for liquid milk production," Chen Na, a marketing department staffer, told the AP.

"Better safe than sorry," she said.