Melamine disaster a lesson for the ingredients sector

Due diligence is the only appropriate response, experts say

China's reputation for food safety has taken another battering following the discovery that contaminated infant formula was to blame for the deaths of four babies and illness in more than 50,000 young children. Third-party raw-milk suppliers trying to cut costs are believed to have added melamine to milk because its high nitrogen content masks the resulting protein deficiency. Authorities have arrested 40 persons in connection with the case and may impose the death penalty.

White Rabbit Creme candyCadbury, Lipton Milk Tea sold in Asia, and White Rabbit Creme candy sold in the US were recalled, and multiple Chinese dairies recalled products that contained trace contaminants. Tristar Food Wholesale Co of New Jersey recalled Blue Cat Flavor Drink, as well.

Regardless of whether or not one's company is in the dairy sector, there is a lesson here for all food-ingredients manufacturers to know their supplier before penning a deal. It comes down to two words — due diligence. "While the scandal has brought about renewed focus, the unfortunate scenario has broader implications," said Todd Norton, COO of AM Todd, because any product that is purchased on price alone, especially through 'laptop brokers,' with no measure of quality and validity, is open to lucrative schemes such as adulteration.

Andrew Buirge, with Aim & Act, a consultant company specializing in China, says his company is occasionally confronted with counterfeit materials that pass routine testing, which means hiring a synthetic chemist for secondary testing is mandatory for materials not manufactured in house. "We have been instructing all our clients to perform the due diligence necessary to ensure their materials are exactly what they are believed to be. In many cases our clients are obtaining raw materials as well as packaged product from China with adequate documentation, but this is not enough in today's world," Buirge said.

Lipton Milk TeaTo further exacerbate the problem, Norton said, there is no recognized authority to bring about absolute changes, which is why his company has placed two of its own employees in China for most of the year to oversee the supply chain. "Ultimately our name goes on the label, so we feel confident having our fingerprints on all aspects of the supply chain," he said.

This level of oversight is perhaps where things went awry for Fonterra, the New Zealand dairy co-op that owns 43 per cent of Sanlu, the Chinese infant-formula manufacturer implicated in the scandal. In hindsight, the tragedy reveals a lack of regulatory oversight, but also a lack of moral judgement that is difficult for Western minds to understand, particularly when one considers that Li Changjiang, China's food-safety watchdog, received complaints as early as December 2007 that the formula was linked to kidney-related illnesses in babies, according to the Associated Press.

Fonterra CEO Andrew Ferrier said the Sanlu board, including Fonterra's three director representatives, knew about the tainted formula as early as August 2008, and consequently "pushed hard" for a recall. Another few months passed before tests showed the milk was tainted with melamine.

CadburyAnother six weeks passed before a full-out public recall took place, but only when the New Zealand government intervened. Prime Minister Helen Clark said her government learned of the contamination on September 5, and informed the Beijing officials three days thereafter. "We were the whistleblowers and [the Chinese government] leapt in and ensured there was action on the ground," Clark told TVNZ, stating that Fonterra had "been trying for weeks to get official recall and the local authorities in China would not do it." She added: "I think the first inclination was to try and put a towel over it and deal with it without an official recall."

Is the answer to give up on Chinese-sourced products? "No way," Buirge said. "We must understand that China is developing and experiencing an industrial revolution, which means problems need to be identified and addressed. "Most importantly," Buirge said, "it is ultimately the responsibility of the company to test and retest, and even more importantly to audit the entire process to bring Chinese practices in compliance with our GMP standards."

This may get a little easier now that the FDA has placed inspector field offices in Beijing, Shanghia and Guangzhou, but it by no means leaves companies off the hook.

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