It has been six years since the initial baby milk food safety scare. In this incident, China saw approximately 300,000 babies falling ill and as a result, one of the biggest foreign investors received one big surprise.
New Zealand dairy group, Fonterra Cooperative, is one of the world’s largest dairy companies and in the wake of these events, had invested millions of dollars into the Sanlu group. The Sanlu group was one of the several companies that were found to have mixed an industrial chemical into the milk powder in attempts to artificially raise the protein levels. After this scam, Sanlu declared bankruptcy and four of its executives were imprisoned.
Despite losing $200,000,000, Fonterra declared that they are going to make a profit from their new scheme. Fonterra is planning to spend an extra $500,000,000 on Beingmate Baby and Child Food Company, a Chinese manufacturer of infant formula and help them adopt a better food safety scheme.
For many major foreign companies investing in China, the main issue is how to maintain ensure that their standards are enforced by all workers at all stages of the food supply chain.
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