GUANGZHOU - Sunlife, a seller of bovine colostrum products in the Chinese market, was punished for false advertising. The company had, allegedly, made false claims about sourcing its products from New Zealand with "original packaging", Chinese media reported on Wednesday.

The company's Guangzhou branch imported about 12.3 million small bags, equivalent to 300,000 cans, of colostrum products from Hong Kong between April and June this year, according to earlier reports by Xiaoxiang Morning Herald in Central China's Hunan province.

The reports said the imported small bags, which could be packed in cans for sale, seemed to contradict the company's claim that its products are all imported with original packaging.

After Chinese media and the public were attracted to this latest exposure of a possible dairy-related scandal, the market watchdogs in Hunan launched investigation into the case.

After days of probe, the commerce authority of Yuhua district in Changsha, capital of Hunan, said on Tuesday that Sunlife indulged in false advertising and that it would be penalized, without going into the details of the punishment.

Sunlife, pledging that all small bags containing colostrum powder were imported with original packaging from New Zealand, acknowledged in a statement that the "imported with original packaging" label should not have appeared on the cans.

The company said it was apologizing to consumers and the media for the inconvenience caused and pledged to correct the label.

The commerce administration in Guangzhou, capital of Guangdong province, sealed Sunlife's warehouse in the city and has begun investigating the company since last week.

The products in small bags were meant for a charity program in cooperation with the government and not for sale, Ji Zhidong, a managing director of Sunlife China, was cited as saying by Guangzhou-based News Express.

Questions have also been raised concerning the way Sunlife operates.

The company says on its Chinese website it is "a well-known New Zealand-based company, wholly-owned by Sunlife Trust in Auckland, with production coordination and research and development centers in Hamilton and Dunedin". It also boasts that its products are being sold in 30 countries and regions since 2000.

However, Sunlife Trust was found by New Zealand media to have only one individual shareholder in New Zealand and its address leads to a law firm, which serves Sunlife.

Sunlife products are not visible at stores in New Zealand, although Ji said they were available in certain stores run by the local Chinese.

The company has no plant of its own, he admitted, but its Chinese website said a host of New Zealand and Australian dairy producers such as Fonterra, Tatura as well as Open Country Dairy Limited are Sunlife's strategic allies.

However, these "strategic allies" denied they have a close connection with Sunlife, according to Xiaoxiang Morning Herald.

Workers with two Australian brands contacted by the paper said they "never knew of the company (Sunlife)".

A spokeswoman with Fonterra China, who refused to be named, said the only transaction between her company and Sunlife was a 2006 colostrum supply contract.

"We have asked Sunlife to remove our logo from their website," she told China Daily.

The English version of Sunlife's website shows nothing but the home page, claiming to offer "the best colostrum from the world's best cows," with an e-mail address in New Zealand and some contact information in China.

Sunlife's Guangzhou branch had called the allegations a malicious slander started by competitors disguised as consumers and reported the case to the police in provinces of Liaoning and Hunan, Information Times reported.

Tan Xuezhen contributed to this story.