Sanlu milk powder scandel

Topics: Milk, 2008 Chinese milk scandal, Dairy product Pages: 15 (3285 words) Published: April 23, 2015


An Analysis of Sanlu Milk Powder Scandal in China in 2008

Written by: Lou Yuxi
Supervised by: Chee Soo Lian

PSB Academy

June 2013

Abstract
This research aimed at analyzing the causes and negative effects of Sanlu milk scandal in China in 2008.Many children suffered the diseases named urinary tract stone because of drinking the milk products which contain melamine. The main reason the companies do that is they want to increase the content of protein at less cost by adding melamine when they face the stresses of the rapid growth in dairy industry. The companies and government has no good supervision and quality tests. However, the government and the companies also have responsibility for this scandal, even as well as the consumers, because the lack of awareness of food safety, they have responsibility. Since the serious event, it has negative effects on society. On the one hand, to the public, people feel angry about this event, and it has influenced public’s attitude and habit. On the other hand, it is no doubt that the loss to dairy industry has been tremendous. Farmers and companies almost lost everything. Sanlu went bankrupts due to this scandal, and the other dairy companies also bear a great loss. Some countries banned imports of China dairy products. In this paper, the lessons in this incident and method will be discussed.

Key words: causes, negative effects, Sanlu milk powder, melamine, dairy industry

Introduction
There was a milk powder scandal occurred in China in 2008.An increasing number of infants who have urinary tract stone had been reported since the spring of 2008. According to Chen (2009) , more than 29,400 infants and young children are victims, and even six children died in the incident by the end of 2008. This event damaged China’s dairy exports, or even food exports. A spokesman from the World Health Organization said that it was not an isolated accident, a large-scale intentional activity to deceive consumers for simple, basic, short-term profits. This is because the companies add melamine which could cause urinary tract stone to milk products.22 dairy companies were involved in this incident, and Sanlu, which was the TOP3 dairy company also among them. There is a kind of infant formula pricing 18 yuan (about $3) per bag had been produced. In the next several years, the products have became famous and occupied a large portion of market shares. According to Financial Newspaper, before this scandal was reported, 18.26% marker shares of milk powder has been held by Sanlu’s products. In addition, Sanlu’s production and sales ranked first in the same industry for 15 years in a row. From Figure 1 comes from China Dairy Industry Assocation, it is clearly shows the fact that Sanlu was the Top 3 dairy companies in China (cited by Hu and Gale, 2009). Whereas, the companies hid the truth when this event has been reported, and they even did not want to be responsible for this. On December, 2008 ,Sanlu went into bankruptcy due to the melamine incident. Increaseing in demand, price competition caused Sanlu add melamine to milk for lower cost. This is because melamine can increase the protein count so that the products could pass quality tests. Another reason is that the government and companies have no good supervision. Since this serious incident, dairy industry did a lot of impact not only on domestic market, but also on foreign. To domestic, farmers had a huge loss as suppliers, and dairy firms also bear the tremendous loss. To foreign, Chinese dairy products were limited by many countries. At the same time, foreign dairy products held Chinese market rapidly. have to out well their milk because they cannot sell that. The dairy companies also face a difficult challenge. Foreign countries and organizations like, the United States, Japan and the European Union banned imports of Chinese dairy products even food. Due to this incident, many people in China do...

References: Ruijia Yang, Wei Huang, Lishi Zhang, Miles Thomas & Xiaofang Pei (2009). Milk adulteration with melamine in China: crisis and response. Quality Assurance and Safety of Crops & Foods. Wiley Online Library.
http://onlinelibrary.wiley.com/doi/10.1111/j.1757-837X.2009.00018.x/abstract?deniedAccessCustomisedMessage=&userIsAuthenticated=false
Xiaojing Lu (2011)
http://scialert.net/qredirect.php?doi=ajar.2011.176.185&linkid=pdf
Junshi Chen (2009)
http://www.cmj.org/ch/reader/view_abstract.aspx?file_no=200912134025550&flag=1
Fred Gale & Dinghuan Hu (2009)
http://ageconsearch.umn.edu/bitstream/51613/2/China%20Dairy%20industry%20IAAE%20_June2009.pdf
Jianli Liu, Shuguang Ye & Lei Yuan (2010)
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