Next, there were more damaging reports that this contamination was known earlier but was repressed by Chinese authorities to ensure that the Beijing Olympics were not disturbed (a truly diabolical choice, and possible only in a dictatorship such as China where the press cannot report on such things if the censors don’t pass it). However, this is not the end. Imagine the case where this melamine was also added to animal feed (and China exports a large amount of animal products):

Chinese regulators are widening their investigation into contaminated food amid growing signs that the toxic industrial chemical melamine has leached into the nation’s animal feed supplies, posing health risks to consumers. The announcement came after food safety tests earlier this week found that eggs produced in three different provinces in China were contaminated with melamine, which is blamed for causing kidney stones and renal failure in infants. The tests have led to recalls of eggs and consumer warnings.
The cases are fueling global concerns about Chinese food. In Hong Kong, food safety officials announced this week that they would begin testing a wider variety of foods for melamine, including vegetables, flour and meat products. On the mainland, Shanghai and other cities are moving aggressively to test a wide variety of food products for melamine, including fish and livestock feed, according to the state-run news media, which has in recent days carried multiple reports on melamine in animal feed. In the United States, worried consumers frantically e-mailed one another on Thursday and Friday about the possibility of melamine-tainted Halloween treats following a spate of news reports that some candies and chocolates made in China or with ingredients sourced in China had tested positive for high levels of melamine or been destroyed in recent weeks as a cautionary measure.

In the spate of a worldwide slow down in economies, such scandals about food can cause immense problems for China’s reputation with it getting a reputation as a place where quality can be compromised. Given that this relates to food stuffs, consumers would be even more worried, and if this relates to food stuff that children need and consume, parents would rather not take the risk. There are already news reports about large scale culling of chicken after it was discovered that eggs were contaminated with melamine.
In the past, China has already come under pressure to due to contamination / quality problems with children’s toys, pet food, seafood exports. In this particular case, a lot of the consumers are also perplexed as to what manner of manufacturer would contaminate food items with an industrial chemical, and there are increasing calls for greater restraint (in previous cases, politicians in the consuming countries have also got involved, with some bringing in the issue of Chinese products, that are contaminated, also causing the decimation of such manufacturing facilities in the respective countries).

British chocolate maker Cadbury on Monday became the latest foreign company to be hit by China’s tainted milk scandal, ordering a recall of its Chinese-made products after saying tests “cast doubt” on their safety. Two U.S. food makers were meanwhile investigating Indonesian claims that high traces of the industrial chemical melamine had been found in Chinese-made Oreos, M&Ms and Snickers, but stressed the same goods had tested negative in other Asian countries.

U.S. companies Kraft Foods Inc. and Mars Inc. said they would adhere to a recall order of Chinese-made Oreo wafers, M&Ms and Snickers in Indonesia, but said they wanted to conduct their own tests with outside experts. So far only a local agency has checked the products for melamine, but the levels found were considered very high.

Even now different companies are being strangely hesitant on taking actions that could impact their bottomline, after all, if these companies really cared for consumers, they would have carried out a voluntary inspection on their own and if their products carry melamine, withdraw them from the shelves. Instead, it seems that even though there is a high risk due to the milk products having been manufactured in China, the companies are hesitating in complying with Government orders to remove their products. They must be worried about the public perception if they carry out such a move, but it becomes far worse if they are seen to be dragging their feet in this respect.

China, embroiled in a tainted milk scandal that led to the deaths of four babies and sickened 53,000, suffered from a “deliberate failure” to report the contamination, the World Health Organization said today. “This incident was aggravated by delays in reporting at a number of sources,” Hans Troedsson, WHO’s China representative, told reporters in Beijing today. “These delays were probably a combination of ignorance and deliberate failure to report.”

The melamine-milk crisis has revived concerns about Chinese food-safety controls after previous scares over seafood, dumplings and pet food. The European Union yesterday proposed banning some Chinese dairy products, joining restrictions in more than 20 countries and markets after 22 mainland companies were found to have sold contaminated products. “Controls in China need to be reinforced,” EU Trade Commissioner Peter Mandelson said today in Beijing. “Above all, we expect responsibility from producers and managers in all companies involved in food production.’

This scandal is pushing beyond just milk, with products that use milk also getting affected. Chocolates, candies, yoghurt, ice cream, etc, are all under investigation in countries around the world. In some cases, melamine has been found in many of these products, and they have been pulled from the shelves. As a result, companies around the world have pulled China origin dairy products from stores in their countries, and many questions have been raised on the level of quality inspections in China. Coming soon after the Olympics gave a positive thumbs-up to China’s image, such a major scandal, that too affecting a food item, exposes the lack of quality control in the country’s industries, and has an immense potential to harm China’s exporting image.

Shop shelves in China and elsewhere are being cleared of popular dairy products after tests found contamination in regular milk as well as baby formula. Inspectors found that 10% of liquid milk from three of China’s dairies was tainted with melamine.
The scandal first came to light in milk powder that killed four infants and sickened more than 6,000 others. Suppliers are suspected of diluting milk to cut costs, then adding melamine to make it appear higher in protein. Melamine is an industrial chemical normally used in plastics, and is banned from food stuffs.

This is yet another problem over the quality levels of products made in China, and something that the Chinese Government would do well to repel with some fast action.

Hours before trick-or-treaters began going door to door, the government warned consumers Wednesday that fake Halloween teeth sold by the tens of thousands since last year contain excessive amounts of lead. The agency estimates that since January 2006, retailers have sold 43,000 eight-piece packages of the party favors.
Also Wednesday, Toys “R” Us recalled about 16,000 Chinese-made Elite Operations toys because of lead contamination, the commission said. The recall included four Elite Operations toy sets: the Command Patrol Center, the Barracuda Helicopter, the Super Rigs set and a three-pack of 8-inch figures. No other Elite Operations toys are included in the recall. The toys were sold at Toys “R” Us stores and on toysrus.com between July and October.
The commission also announced recalls of 380,000 Galaxy Warriors figurines and 1,500 SimplyFun Ribbit board games, both for lead-contaminated surface paints. The figurines were manufactured in China and distributed by Henry Gordy International. The board games were manufactured in China and imported and distributed by SimplyFun.

This is very scary; there is bound to be an overall suspicion about the quality of toys made in China, and the level of quality control. China has not helped matters by sometimes reacting angrily about the media focus on these recalls; such anger has no effect on the media, and does not improve the image in any way.

Mattel Inc.’s reputation took another hit after the world’s largest toy maker announced a third major recall of Chinese-made toys in little more than a month because of excessive amounts of lead paint. The latest action, which involved about 800,000 toys and which was announced late Tuesday, is yet another blow to Mattel. The news, along with other recent recalls of tainted Chinese toys from other toy makers, could also make parents even more nervous about shopping for toys this holiday season.
Robert Eckert, chairman and chief executive of El Segundo, Calif.-based Mattel, warned at a press conference last month that there may be more recalls of tainted toys as the company steps up its investigations into its Chinese factories and increases monitoring of production.
For information about Tuesday’s recalls, consumers should call Mattel at 888-496-8330 or visit the company’s Web site at http://www.service.mattel.com

Mattel will now be fervently hoping that this is the last time it faces a situation like this. Mattel would have had to face a significant cut on revenues due to these recalls, what with the cost related to recall, as well as the cost due to lower sales. What makes this situation even more uncomfortable for parents is that toys are something that children get involved with fairly significantly, with very close contact and the prospect of lead contamination is a very scary thought.

Brightly colored children’s bracelets and necklaces line the display case of a Chinese manufacturer in this factory town. Adorned with mini school buses, sandals and other charms, the jewelry sits ready to be sold to foreign and domestic buyers. It also contains lead. While the U.S. government in July issued a recall for similar items, branded as Essentials for Kids, officials at the factory said they knew nothing of it. And because the CJ Accessories factory sells the jewelry to different companies with different brands, identical lead-tainted products could be on store shelves under other names.
Three decades after the federal government significantly toughened regulations on lead in children’s products, American companies have yet to find a way to successfully screen the flood of imported products for the toxic metal. The federal watchdog charged with ensuring they do so is overwhelmed and often ineffective. And the growing list of lead recalls of children’s products underscores how the metal, slathered on with paint or mixed in with other raw materials, is more pervasive than many American consumers ever imagined.

Given that it is going to be very difficult to move out of the low-cost manufacturing regime, especially with most such manufacturing capabilities already having moved to low cost countries; the responsibility for such measures now rests with the manufacturers. As part of their cost accounting, they need to be held responsible for the quality of these products and should include regular and systematic investigation and quality control. It would be very bad indeed if somebody was affected by these products, much worse so if it was a child. It is just not possible to do a quality control at the US borders, even with the best of intentions.

Mattel Inc., the world’s largest toymaker, said a recall of 1.5 million Chinese-made products will reduce second-quarter operating income by almost 50 percent and that it will review the production methods of all its contractors in China.
The lead discovery might force Mattel to find new sources of low-cost goods and may further damage China’s reputation as an exporter, following a recall of “Thomas & Friends” toys in Asia, a U.S. ban on Chinese toothpaste and scandals involving tainted cooking oil and diseased pork. The company is recalling 967,000 preschool toys sold in U.S. stores since May, including Elmo’s Guitar, Dora’s Talking House and 81 other products, the U.S. Consumer Product Safety Commission said yesterday.

This is something that is directly affecting Mattel since this will hit its revenue, and hit on its reputation. Also, since this affects children, one can be sure that politicians will jump on this, and start investigations in Congress on this. It also benefits trade unions since they have always claimed that sending these manufacturing jobs abroad is based on a compromise. It also increases the pressure on China to ensure that quality control is made more stringent.