Survivor leads China’s milk industry
Nevertheless, ethics alone was inadequate. China drafted its first Food Safety Law, which was under the scrutiny of the country’s top legislative body. In late October the draft underwent the third round of examination. As a consequence of the milk scandal, amendments were proposed.
Punishment would be harsher. A company engaged in illegal operation would have its business license revoked and the fine could be as high as ten times the value of related goods, in addition to confiscation of its illegal income.
Professor Jiang Ming’an of Beijing University said a company should be forced by law to make punitive compensation to food poisoning victims. The current compensation for consumers was barely enough to cover the medical cost. A large part of it, in fact, was paid by the government or public institutions, with taxpayers’ money.
“Punitive compensation will greatly raise the law-violating cost of the company. It will also encourage consumers to stand up for their own rights,” said Professor Jiang, who was a deputy to the Beijing Municipal People’s Congress.
The Sanlu milk incident was a bloody crime, if one thought of the infants killed by kidney stones developed from drinking melamine tainted milk, and the tens of thousands of babies hospitalized for the same reason, which numbered 10,666 across thecountry as of Oct. 8.
The suspects detained in Hebei, if convicted, would be punished. So would, probably, board chairwoman of Sanlu Group TianWenhua, who is alleged to have tried to cover up the issue and was detained by Hebei police on criminal charges in mid-September.
The incident had led to the dismissal of a number of officials from prominent posts in the government of Shijiazhuang, capital city of Hebei Province, including two vice mayors. And Li Changjiang, director general of the General Administration of Quality Supervision, Inspection and Quarantine, had resigned because of the organization’s disappointing regulatory work.
SANLU DOOMED
Once a rising star in China’s milk industry, Sanlu was devastated by the melamine scandal. Rumors flew in early October about the possible acquisition of Sanlu by Sanyuan. Although the latter refused to comment on the issue, the publicly listed firm stopped trading on account of that on Sept. 26. Both Sanyuan and Sanlu are state controlled. Sanyuan was better established, with a total assets of 1.3 billion yuan, while Sanlu’s net assets reached1.2 billion yuan before the scandal broke.
Reports said the move was pushed by the government. Negotiation had been tough because the local government wished the potential acquirer to shoulder Sanlu’s debts too, while Sanyuan was interested only in good assets. At least one other company, the Hangzhou-based Wahaha Group, a privately owned firm that produced drinking water and milk drinks for children and was expanding into liquid milk and powder business, had wooed Sanlu.
Tags: dairy, industry, milk