Liquid milk found to be tainted in China

18 now in custody; fourth child dies, more than 6,200 babies sick

China's tainted product crisis has extended to liquid milk, the nation's watchdog agency said Friday, as Starbucks dumped a supplier in China.

The General Administration of Quality Supervision, Inspection and Quarantine said milk sold in liquid form by three leading Chinese dairies is contaminated with melamine, the industrial chemical that as been linked to the deaths of four infants and illnesses in 6,200 others.

A report posted Friday on the agency's Web site says test results showed nearly 10 percent of samples taken from Mengniu Dairy Group Co. and Yili Industrial Group Co. — China's two largest dairy companies — contained up to 8.4 milligrams of melamine per kilogram.

Milk from Shanghai-based Bright Dairy also showed melamine contamination.

Starbucks Corp. said its 300 cafes in mainland China had pulled milk supplied by Mengniu. It said no one had fallen ill from the milk.

The recalls come as evidence is mounting that adding chemicals to watered-down milk was a widespread practice in China's dairy industry.

Powder pulled in July
Meanwhile, the company at the heart of the tainted milk scandal ordered distributors to pull its products off store shelves in early July, weeks before it went public with the problem, two distributors said Friday.

The statements by the distributors in Hebei province, where Sanlu Group Co. is headquartered, raise further questions about when the company and government knew that milk powder being feed to babies was tainted with melamine, a banned industrial chemical. A New Zealand stakeholder in Sanlu has said it was told in early August, before the start of the Beijing Olympics, that there was a problem.

The public was not told until Sept. 11 — after its New Zealand stakeholder told the New Zealand government, which then informed the Chinese government — that the powder, used in baby formula and other products, contained the chemical melamine. The milk is blamed for four infant deaths and the illnesses of 6,200 others.

"We were asked by Sanlu to take all their 2007 to July 2008 baby powder off the shelves in early July" and replace it with new powder, said one of the distributors, Zhang Youqiang.

"Then things got weird. In early August, they came to us again and said all the new Sanlu baby milk powder we had just put on the shelves did not pass 'qualified aviation standards,'" said Zhang, who declined to give his company name for fear of offending Sanlu. Zhang said he was never told what qualified aviation standards meant.

Zhang said he now has warehouses full of contaminated milk powder and is trying to get refunds from Sanlu.

Phone calls to Sanlu rang unanswered Friday and its Web site was not working. China's quality watchdog did not respond after asking that questions be faxed to it.