China: 20 percent of China milk companies involved in melamine scandal

The scandal over contaminated milk in China continues to spread. From two now the number of children who have died has become at least four, and some reports say six. Once the scandal erupted the government was forced to step in and ordered a nationwide investigation into all baby milk powders. The official investigation has found that 20% of China's dairy companies are involved. As we reported previously, the Sanlu Group has been distributing milk containing melamine, a chemical that can make the protein level in dairy products appear higher than it is.

Stripped shelves in a supermarket in China as a result of the contamination

So far two children have died and 50,000 have fallen ill, some developing kidney problems. The head of the Sanlu company was sacked, but how many more heads will have to roll in the coming period?

In the initial investigation 109 dairy companies were checked, of which 22 were found to be selling milk containing melamine. Even Yili, which supplied milk for the Beijing Olympic Games, has been involved in the scandal, and many more.

According to Chinanews.com, Sanlu's chairperson "bore very large responsibility" for what has happened. But how can all this be blamed on one person? Since March parents had been complaining to the company about their babies' discoloured urine. In fact, it has been revealed that Sanlu was aware of the melamine problem back in December of last year. So why was nothing done then? Some babies had already been admitted to hospital in March, so the managers of the company cannot claim ignorance.

As we reported in our previous article, the Sanlu group has been trying to unload responsibility to smaller farmers who supply the milk. According to the Xinhua news agency several of these have been arrested, one of whom was producing 3 tons of milk a day, contaminated with melamine. On 17 September 22 people were arrested, suspected of using the toxic chemical.

If an initial investigation found that 22 companies have been involved   clearly working with many smaller dealers   in this practice of adding the toxic chemical to milk powder, then the problem is not just one company and not just one top manager. It is also the case that it is not just the dairy industry that has been affected by such scandals in the recent period. Already back in 2004, at least 13 babies died after drinking adulterated milk powder. Other food companies have also been involved.

The official Xinhua news agency has revealed that among those arrested some have openly admitted to using melamine. One of these explained that in the past his milk was rejected by the Sanlu company because of its low protein content. He then discovered that if he added melamine this would up the protein levels in the tests and thus be accepted by Sanlu.

As we have seen, attempts have been made to divert attention away from the big companies and blame the small farmers, who supply the milk. The problem, however, is that the small farmers depend on middlemen. These middlemen push down the price the small farmer gets for his produce. Demand for milk products has been growing fast. In fact over the past few years the industry as a whole has been growing by around 30% a year.

In order to increase production the small farmers have been pushed into watering down the milk. But that lowers the protein levels, thus making the milk unacceptable to the large companies. That's where the melamine comes in!

Now, as a result of this scandal China's dairy industry is in serious crisis, as more and more countries impose bans on importing Chinese dairy products. The Chinese government is now desperately trying to restore the reputation of their dairy industry, and is taking measures to seriously review the milk collection system.

This whole scandal reveals the cynicism of these people. When parents were complaining about their children's symptoms they didn't get much sympathy from the officials. Once the scandal broke out, provoking the anger of ordinary working people, they stepped in. And now that their profits are being seriously affected they are stepping up their measures. The milk industry in China is calculated to be worth about $20bn, so the people at the top must be very worried.

What this scandal reflects is the greed for profit that has spread throughout the Chinese economy. Whether state owned or private, Chinese companies are now out for one thing, enrichment for the few! And the authorities turn a blind eye... until a scandal like this one erupts, with babies dieing! Then they have to step in and attempt to re-establish some kind of order. But they punish the individual in order to save the system as a whole. We have seen this many times. They are not going to remove the greedy quest for profit. Market economics is capitalism. Capitalism does not look at the needs of people. Its God is profit.

What is required is not merely the sacking of this or that individual manager. It is the system as a whole that must go. The Chinese workers have paid a heavy price for the "capitalist road". They are learning from their everyday experience what capitalism stands for. At some point they will draw the conclusion that the whole system must go. That is what terrifies the leaders of the so-called Communist Party!