The Chinese Tainted Milk Scandal|Business Ethics|Case Study|Case Studies

The Chinese Tainted Milk Scandal

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Case Details:

Case Code : BECG092
Case Length : 15 Pages
Period : 2008-2009
Pub Date : 2009
Teaching Note : Available
Organization : Sanlu Group and other dairy products companies
Industry : Food and Beverage
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Even as the milk scandal unfolded, many countries like Hong Kong, Taiwan, Singapore, South Korea, Australia, and Indonesia rushed to ban Chinese dairy products. Foreign companies which sold China made products or products which used Chinese ingredients had to recall their products.

As soon the crisis became public, the Chinese Health Ministry ordered the dairy firms to recall the contaminated products.

They were ordered to destroy the recalled products and the products that remained unsold. Sanlu was also asked to stop production and some of the top executives of the company were arrested.

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Government officials who were found guilty were also sacked. The Chinese Health Ministry started testing dairy products across the country.

China's Dairy Industry Association announced that the affected children and their families would get compensation from the dairy firms responsible. To support the affected dairy farmers, the government announced that it would give them a subsidy.

On October 04, 2008, the Chinese government announced that tests had shown that there was no melamine contamination in the fresh supply of liquid milk. But the damage had already been done.

The incident raised concerns about food safety standards in China besides delivering a body blow to China's reputation as one of the leading food products exporting countries.

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