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Disgraced dairy giant reels under scandal

(China Daily)
Updated: 2008-09-24 07:46

A woman with her baby returns the Sanlu milk products for a refund at a shop in Yinchuan, capital of Ningxia autonomous region, last week. Xinhua

SHIJIAZHUANG: The crowds at the headquarters of Sanlu Group have thinned since its tainted formula milk scandal broke out a fortnight ago, but many were still arriving earlier this week to return the milk powder they bought to the disgraced dairy giant.

The company in this capital of Hebei province set up booths in its courtyard to collect its returned products. In front of two cash counters, long lines of customers waited to get refunds on their purchases.

Since Sept 12, Sanlu has recalled all baby formula products found to contain melamine, a chemical that led to infants who took its milk powder developing kidney stones. Tainted baby formula has claimed the lives of four infants and left about 53,000 others suffering from various urinary tract problems.

"My brother returned several bags of milk powder two days ago and was compensated for his purchase in full," said Mei Xiao, a Shijiazhuang resident in her 20s.

"I came to return bagged milk, but they said they were still examining bagged milk and the result has yet to come out."

A company employee asked Mei to write down her address, contact details and the serial numbers of the bagged milk. "We will inform you on how to return them if this batch contains banned substances," he said.

On the other side of the courtyard, workers unloaded boxes of milk powder from trucks, company employees counted the recalled products and an accountant led people to Sanlu's offices to receive their refunds.

One wholesaler of Sanlu's milk powder, surnamed Gong, sat waiting in the shade of a tree. Together with other Sanlu wholesalers from neighboring Henan province, she arrived at the company with two trucks loaded with about 1,000 boxes of baby formula.

"I hope Sanlu can repay me at the wholesale price," said Gong, who is in her 30s. She did not want to give her full name. "Even if they do, I will still suffer losses of about 30 percent, due to transport and storage costs."

Wholesalers flooded into Sanlu's headquarters, with consignments of up to 4,000 boxes of powdered milk. "Sanlu owes me about 1 million yuan ($147,000)," said a wholesaler surnamed Guo, also from Henan. She had recalled the stocks of formula milk from her retailers and returned them to Sanlu.

"I have been here five days and I'm still waiting for Sanlu to give me a solution," she said, sitting on the stairs at the entrance of an office building.

All of Sanlu's plants have reportedly been ordered to stop production. A joint investigation team from the central government headed by the Ministry of Health is said to be inspecting the company.

Tian Wenhua, who was sacked as Sanlu's board chairwoman and general manager on Sept 16, was also arrested and charged with producing toxic food a day later. If convicted, she may face the death sentence or life imprisonment.

The new Sanlu board chairman and general manager, Zhang Zhenling, was elected on Sept 18. He has apologized to the public on behalf of the company and promised to deal with the incident properly.

Workers face uncertainty

Sanlu, the largest dairy producer in Hebei, has about 10,000 employees.

Staff at the lowest level were visibly worried about their uncertain future.

"I have no idea what will happen," said one worker, Tian, who was in her mid-30s. She did not want to give her full name.

Tian said she has worked for Sanlu for 12 years and it was her first job.

"What if the company shuts down and I lose this job? I am not young and it will be hard to find a new one. I have aged parents to support and a son in primary school," she said.

Tian has been at Sanlu's headquarters from morning to evening everyday, including weekends. She helps to set up booths, hand out notices and answer questions from customers.

"What I can do now is do my job," she said.

The neighborhood near the Sanlu headquarters is home to many of its employees and retired workers. Chen Xiuqiao, who retired from Sanlu 7 years ago, has lived here for decades.

"I worked in Sanlu for about 30 years. The company developed well in the past few years. My pension increased," Chen said.

"I never expected such an event. How could a firm with a history of 50 years come to this?"

"What everyone here can do is wait. If it is bad news, I hope a solution for workers comes as quickly as possible so that we have time to prepare for it," said a young woman working at the quality control lab, who did not want to be named.

"But I still hope the company can pull through this crisis. I like this job. I am willing to go on working for Sanlu."

Xinhua