The melamine stain: One sign of a worldwide problem - The... http://www.nytimes.com/2008/10/12/business/worldbusiness/...

BANGKOK — Is there more tainted food out there?

The far-flung recall of products contaminated with melamine - dozens of brands of

infant formula in China, Cadbury chocolates in Australia, Lipton green tea in Taiwan and
Nabisco Ritz cheese crackers in South Korea among them - has shaken the confidence of
consumers and provided a window into what some describe as disturbing aspects of the
increasingly globalized food manufacturing industry.

The melamine scandal has heightened fears that the food business is racing ahead of the
ability of governments to detect health-threatening contamination, whether accidental or
deliberate.

The physical toll of the milk scandal has been largely contained to China: the four
children who died and almost all of the 54,000 who were sickened by the melamine were
on the Chinese mainland.

But melamine has been found in products as far away as the Netherlands and the United
States. And recalls far from China affected food made by Chinese companies and
multinational brands.

Now shoppers are stopping in supermarket aisles to read labels more closely. They are
shunning Chinese brands and choosing international name brands instead. But even
then, they are wary.

"People used to have more confidence in international brands," said Yang Fan, a
specialist on the food industry at the Shanghai offices of Euromonitor, a market research
company. "Now the multinationals have similar problems."

Shan Cheung, a Hong Kong housewife, said she tossed out all her Lipton tea packages,
Cadbury chocolates and cookies when she heard that some of those brands had found
small amounts of melamine in their products. "Now I look very carefully if the food I am
buying are made in China," she said, and she avoids it.

Worrying for consumers both inside and outside China is the sense that processed foods
may contain tainted ingredients no matter how trusted the brand. When contamination
occurs, they cannot be sure of the provenance of the ingredients - and, ultimately,
whether foods are safe.

Big food companies, like Nestle, Kraft and Danone, say that while they do not use

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Chinese milk in their products outside of China, they use other Chinese ingredients for
goods sold around the world.

"It's difficult sometimes to try to figure out how a certain product has been assembled
and where a problem may have come from," said Peter Hoejskov, a specialist in food
quality and safety at the regional headquarters here of the Food and Agriculture
Organization, a UN agency. "The globalization of food production is definitely an issue."

Chinese companies are major suppliers of common ingredients and additives, like citric
acid and many types of vitamins. The country is the world's largest exporter of seafood,
most of it from fish farms, and a major exporter of chicken, fruits and vegetables. In the
medical field, China sells large quantities of penicillin and paracetamol, an aspirin
alternative, overseas.

Chinese products have been failing food inspections for years. Hundreds of Chinese
shipments have been stopped by inspectors in Europe, the United States and Asian
countries in recent years because they contained banned chemicals or were unfit for
consumption, government data show.

In the European Union alone, Chinese fish and shrimp were rejected because they
contained fungicides, antibiotics or other banned drugs; dried fruit and vegetables were
found to have more than the allowable level of the preservative sulfite; peanuts had
excessive levels of fungus-related toxins; and packaged foods tested positive for heavy
metals that leached from their packaging.

Although only the world's eighth-largest exporter of food, China ranked in first place last
year for the number of hazardous imports detected by regulators in the European Union.
China had 352 notifications, its highest level ever, compared with 191 for the United
States, which is the world's largest agricultural exporter.

On Friday, the Chinese government announced measures intended to improve the

quality and safety of dairy products as well as new regulations on the breeding of cows
and the production and sale of dairy products. It also called for tougher penalties for who
people who violate safety standards, according to Xinhua, the official state news agency.

China is not alone in struggling with tainted food. The European Union's annual report
on food safety found contamination in foods exported from well over 100 countries.

Hoejskov said the scale of production involved in the food industry had greatly increased
the monetary incentive to cut corners and adulterate food.

"There is a lot of cheating," he said. "Sometimes you discover it and sometimes you never

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discover it."

One of the difficulties for regulators is knowing what to look for - and having the
manpower to carry out the tests. In the case of the Chinese milk scandal, Fonterra, a New
Zealand company that owns a large stake in one of the manufacturers that distributed
tainted baby formula, says it never occurred to them to check for melamine.

"Melamine is not something you would be reasonably expected to find in milk," a

spokeswoman for the company said. "We have only recently become aware of one dairy
company in the world who routinely tests for melamine."

Melamine, a white powder used to make plastics, was added because it duped the
instruments used to measure protein, creating the false impression that diluted or
poor-quality milk was up to standard.

Governments often do not have adequate resources to carry out more than basic,
random testing. The Food and Drug Administration in the United States only has the
capacity to examine 1 percent of all shipments into the country, according to a report last
year by the Congressional Research Service, a nonpartisan U.S. government agency.

The problem can be more severe in poorer countries.

Quirino Marquinez, the president of the Consumer Union of the Philippines, a private
nonprofit group, said the country's food inspection agency "only takes action if someone
complains or if the media reports about food products that are defective or pose serious
threat to public health." The agency, he said, "needs to be more proactive."

With China's growing influence in Asia, governments in the region are also sometimes
afraid to anger Beijing. Officials at the Thai food and drug administration said in
interviews that they had discovered mushrooms imported from China with unacceptably
high levels of mercury. But they declined to disclose the full list of Chinese products
barred from the country.

"I hesitate to give you this information as I'm afraid that it will affect the relationship
between Thailand and China," said Jureeporn Boonyawongwiroj, the director of the
Bureau of Food Quality and Safety. "When I was in China last time, they complained to
me about this," she said.

China's melamine scandal has been particularly damaging to consumer confidence

because it comes after Beijing said it had tightened regulations and heightened vigilance
in the wake of problems with tainted dog food, also made in China, that sickened or
killed thousands of dogs worldwide last year, and other tainted products.

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In July 2007 the government carried out the execution of the head of the food and drug
safety agency who was convicted of taking bribes in return for approving drugs.
Regulators also closed 180 food manufacturers that it said had been using banned dyes,
hydrochloric acid and formaldehyde in candies, seafood, pickles and cookies.

"This whole system is broken," said Bing Zhang, a consultant based in Shanghai for AT
Kearney and co-author of a report on food safety in China last year.

"The root cause is a combination of factors - the intense competition for profits and a
general lack of tracing and monitoring," he said.

Fruit, vegetables and most meat in China are not required to go through a cold
distribution chain, said the Kearney study.

Almost 80 percent of retailers do not monitor temperature of products during shipping

and two-thirds did not check temperature when they receiving goods, the study found.

In recent weeks, Cadbury withdrew candy bars from shelves in Hong Kong and Australia
after it found trace amounts of melamine in them.

Unilever recalled Lipton Green Milk Tea from the Taiwan market because the product
used Chinese-made milk. H.J. Heinz Co. recalled a batch of baby food in Hong Kong
because it showed trace levels of melamine. In all of these cases, the levels of melamine
were too low to make people sick. But the companies sought recalls to avoid further
public relations damage.

The Chinese government now says recent testing of the Chinese milk supply shows no
sign of melamine contamination.

There are some signs that the Chinese food industry is cleaning up its act. The European
Commission said it had recorded a decline in quality problems with Chinese food
imports in the second half of last year. It is also working with Chinese regulators to
improve their monitoring techniques.

Yet the Food and Drug Administration in the United States has maintained an "import
alert" on certain types of seafood - shrimp, catfish, basa, dace and eel - coming from
China.

As of April 2007, China had the third-highest rate of import refusals in the United States,
after Mexico and India.

Carlos Conde contributed reporting from Manila, Janesara Fugal from Bangkok and
Carmen Ng from Hong Kong.

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