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China dairies see investors dump stocks

By Du Wenjuan (Chinadaily.com.cn)
Updated: 2008-09-23 17:38

Products of Yili Group are left at a basket for recall at a supermarket in Hong Kong Friday, Sept. 19, 2008. [Agencies]

The scare among consumers of melamine-tainted dairy products has triggered a series of negative effects for China's dairy industry, though new regulations and inspection procedures have been introduced.

Special coverage: Tainted Milk Scandal Related readings: Shijiazhuang party chief sackedChina takes milk scare 'very seriously' Quality watchdog chief quits 13,000 babies hospitalized

China's CCTV at its prime-time 30-minute news program Monday announced the resignation of Li Changjiang as the minister in charge of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). Meanwhile, the party chief of Shijiazhuang, where Sanlu Dairy is located, was sacked by the central government.

So far, almost 13,000 infants nationwide have been hospitalized with kidney problems as a result of drinking milk contaminated with melamine. Four deaths have been reported.

The quality crisis in the dairy industry has brought deepening worries for the future of the whole food sector. It may trigger a "systematic risk" in food and beverage stocks, a latest report from China Galaxy Securities, one of China's biggest State-owned brokers, has pointed out.

The results of a government-led probe announced last Tuesday showed that out of 109 dairy producers checked, 22 had been found to have produced batches of milk contaminated with the chemical compound.

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