2008 Chinese Milk Scandal

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MGMT 681 Ruixin Gong 2008 Chinese Milk Powder Scandal In 2008, the scandal of Sanlu milk powder broke after 16 infants, who had been fed on milk powder produced by Sanlu Group, were diagnosed with kidney stones. ("") By November 2008, the Chinese government announced there were 300,000 estimated victims affected by Sanlu milk powder and six infants dying from kidney stones and other kidney damage. ("")The cause of kidney damage was a chemical named melamine. If melamine was added to milk, the milk will appear to have higher protein content. In 2009, the executives of Sanlu Group were on trial for toxic milk production. Sanlu Group was ordered to halt production and compensate for victims more than 9 million yuan. In the same year, Sanlu announced breakup due to insolvency. ("") The reason why this scandal was so huge is because Sanlu was a famous company in China. Sanlu Group CO., Ltd, Sanlu for short, was a Chinese dairy products company based in Shijiazhuang, the capital city of Hebei Province. Sanlu was founded in February 1956. After generations of struggle, Sanlu has been the one of China’s most famous and biggest companies of infant formula. New Zealand’s Fonterra owned 43% of Sanlu. In August 2005, Sanlu was considered one of 500 most influential brands in China. In 2006, Forbes selected Sanlu as the first brand in dairy industry in China. In 2007, Sanlu was awarded as the most competitive brand on the market by the Chinese Ministry of Commerce. Its products sold well in the whole Chinese market. At that time, the brand value of Sanlu was worth 149.07 billion yuan. ("") Since December 2007, Sanlu Group received 1327 complaints successively. Customers reflected that some infants’ urine had red sediment after they ate Sanlu infant milk powder. Worse, this situation appeared more and more. ("") The technical department of Sanlu Group received

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