Made in China milk removed from Hong Kong

Hong Kong's two biggest grocery chains removed all milk made by a leading Chinese dairy from shelves Friday after traces of a chemical that has killed and sickened babies was found in products in mainland China.

PARKnSHOP supermarket chain began pulling milk produced by Mengniu Dairy Group Co. from its shelves Friday morning, spokeswoman Pinky Chan said. A second supermarket chain, Wellcome, soon followed suit, spokeswoman Annie Sin said.

The two companies acted after mainland regulators found milk sold by Mengniu and two other major Chinese dairies contained the industrial chemical melamine.

A Mengniu executive apologized for the tainted milk at the company's first-half earnings press conference in Hong Kong on Friday.

But in a show of confidence, Chief Financial Officer Yao Tongshan sipped from a small carton of Mengniu milk as he told reporters that only a small portion of the company's inventory was contaminated and that the milk came from small suppliers.

"Large-scale milk farms are very disciplined. They won't take the risk to do something like that (add melamine to milk)," Yao said.

Yao said Mengniu is checking all its products and investigating if any of its managers played a role in the contaminated milk.

"Whoever needs to step down will step down. Whoever should take legal responsibility will take legal responsibility," he said.

Mengniu Chief Executive Niu Gensheng did not attend the press conference. Asked about his absence, Yao said he was busy dealing with the milk scandal in China.

Mengniu reported its first-half gross profit surged 35 percent from a year ago to 3.3 billion Chinese yuan (US$483 million).

Trading in Mengniu's Hong Kong shares has been suspended since Wednesday.

Test results showed nearly 10 percent of samples taken from Mengniu and Yili Industrial Group Co. products contained up to 8.4 milligrams of melamine per kilogram, a report posted on the Web site of China's General Administration of Quality Supervision, Inspection and Quarantine said.

Milk from Shanghai-based Bright Dairy also had melamine contamination, it said.

Hong Kong authorities recalled all Yili products Thursday, including milk, yogurt, and ice cream.

The spokeswomen said Bright Dairy products are not sold at PARKnSHOP and Wellcome.

Melamine-laced milk powder has been linked to four infant deaths and illness in 6,200 other babies on the mainland.

The chemical has no nutritional value but is high in nitrogen, making products containing it appear to be higher in protein. Suppliers trying to cut costs are believed to have added the toxic chemical to watered-down milk.

Mengniu and Yili, China's two biggest dairies, were among companies forced to recall baby formula in China on Wednesday. So far, all the sick infants in China were found to have consumed milk powder produced by another company, Sanlu Group Co.

The widening crisis has raised questions about the effectiveness of tighter controls China promised after a series of food safety scares in recent years over contaminated seafood, toothpaste and a pet food ingredient tainted with melamine. In 2004, more than 200 Chinese infants suffered malnutrition and at least 12 died after being fed phony formula that contained no nutrients.

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