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3,213 cases, totaling 13,776 cans and 697 bags of expired Kanglelai goat milk powder, had their dates altered and were sold on a large scale.
Foreign milk powder brands, even under strict crackdowns, dare to commit large-scale fraud. Can we trust these New Zealand brands and lesser-known ones?
It is understood that those involved in the fraud have been referred to the judiciary and will face severe legal punishment.
On February 6, the Shenyang Administration for Industry and Commerce disclosed a case involving the alteration of production and expiry dates on goat milk powder. The goat milk powder involved is an adult milk powder brand, with quantities exceeding 3,000 cases. Despite the national policy strengthening supervision of food and drug safety, these actions were taken in defiance of the law, highlighting the blinding power of greed and audacity.
On February 6, 2018, the Shenyang Administration for Industry and Commerce disclosed the case of "Jin Zhibao Trading Co., Ltd. altering production and expiry dates on goat milk powder" on its official website. The original text is reproduced below:
After receiving a case transfer letter from the Wuxi Xinwu District Market Supervision Administration, the Wulihe Supervision Office suspected that Shenyang Jin Zhibao Trading Co., Ltd. was selling goat milk powder with altered expiry dates. Following the instructions of bureau leaders, an investigation team was immediately formed, and case handling work began. The case took over 50 days. Under the direct guidance of Deputy Director Zhang Hongwei and Deputy Director Luo Zheng, evidence collection was swift, and clues were found during surprise inspections. In accordance with case handling procedures, the case has been transferred to judicial authorities.
Following case procedures, the team first analyzed and predicted the case, collected various materials and evidence, communicated with professional departments such as the Legal Affairs Section, and reported on case progress at any time. On the day the case was filed, an interview was conducted with Lu Yan, the legal representative of Shenyang Jin Zhibao Trading Co., Ltd., who signed the investigation record. On November 7, the Wulihe Office, carrying relevant legal documents such as detention orders, went to the company's warehouse to inspect the purchase and sales ledger. On-site investigation revealed that the party had purchased a total of 3,213 cases from Wuxi Kanglelai Pharmaceutical Co., Ltd. on April 27 and May 8, comprising 13,776 canned and 697 bagged milk powder. Of these, 6,754 cans and 697 bags had been shipped to Guangzhou, with 6,894 cans in stock and 114 cans unaccounted for.
It was confirmed on-site that the production date of the goat milk powder purchased was September 28, 2015, with an expiry date of September 28, 2017. These dates had been altered to a production date of April 28, 2017, and an expiry date of April 28, 2019. The party's actions were suspected of violating Article 34, Paragraph 1, Item (10) of the Food Safety Law of the People's Republic of China. In accordance with Article 110, Paragraph 1, Item (4) of the Food Safety Law, on November 7, 2017, the Wulihe Office sealed 6,894 cans of Kanglelai goat milk powder suspected of having altered expiry dates, took photos, and collected relevant evidence. The party signed the on-site inspection record to confirm.
Given the significant value of the case and the involvement of multiple regions, after a decision at the director's office meeting, and in accordance with Article 3, Paragraph 1, Item (1) of the "Interpretation of the Supreme People's Court and Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Food Safety," the district bureau transferred the case to judicial authorities for handling.
According to inquiries, Shenyang Jin Zhibao Trading Co., Ltd. was registered in June 2013 with the Shenhe District Market Supervision Administration in Shenyang. The legal representative is Lu Yan, and the business scope mainly includes wholesale and retail of food, health food, agricultural and sideline products, aquatic products, and other industries.
The aforementioned Wuxi Kanglelai Pharmaceutical Co., Ltd. was registered in Wuxi in 2014 and is a company specializing in the production and processing of pharmaceuticals, food, health food, dairy products, daily necessities, cosmetics, raw materials, and other products. According to reports from Wuxi Xin Media Network, the Kanglelai series of milk powder was launched on December 12, 2015, and is an independent brand of the Wuxi Modern Agricultural Research Institute, which has been registered in New Zealand. The brand of the 3,213 cases of milk powder involved in this case has not yet been announced, but it is likely that some of them are from the Kanglelai series.
A search found that New Zealand original imported carecoming Kanglelai goat milk powder includes whole milk powder and organic milk powder.
In December 2015, Wuxi Xin Media Network reported that New Zealand milk powder is popular among consumers for its high quality. On the morning of December 12, six Carecoming (Kanglelai) milk powder products from New Zealand were officially released to Wuxi citizens. However, unlike other imported milk powder, these products have a "Wuxi core."
The report stated that Kanglelai is an independent brand of the Wuxi Modern Agricultural Research Institute and has been registered in New Zealand. The company focuses on New Zealand, with direct supply bases for beef, mutton, cow and goat milk, and fruits, and imports these products from New Zealand to China. Kanglelai also cooperates with New Zealand's largest milk powder processor, New Zealand Xinyimei Group, which is responsible for producing the six independently branded milk powder products released this time.
Among the six Carecoming (Kanglelai) independent brand milk powder products, three formulas were developed by the Wuxi Modern Agricultural Research Institute in collaboration with the Royal Society of New Zealand and other research institutions, tailored to the needs of Chinese consumers, and have been registered with relevant authorities. Additionally, these six products use New Zealand milk sources and are produced and processed locally before being shipped to China, passing through both New Zealand and Chinese quality inspections, ensuring the quality of the milk powder to a certain extent. Notably, one of the six products is a goat milk powder, with goat milk sourced from Kanglelai's direct supply base in New Zealand. At the launch event, in addition to the six independent brand products, Kanglelai also released six co-branded infant formula products.
After the case was transferred from the industry and commerce department to the judicial department, no further updates have been released. However, from the disclosure, it is known that Shenyang Jin Zhibao Trading Co., Ltd. artificially extended the "shelf life" of these milk powders by one and a half years by altering production and expiry dates.
The specific content of Article 3, Paragraph 1, Item (1) of the "Interpretation of the Supreme People's Court and Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Endangering Food Safety" is as follows:
Article 3: The production or sale of food that does not meet food safety standards, under any of the following circumstances, shall be deemed as "other serious circumstances" as stipulated in Article 143 of the Criminal Law:
(1) The production or sale amount is 200,000 yuan or more; (2) The production or sale amount is between 100,000 and 200,000 yuan, and the quantity of food not meeting safety standards is large or the duration of production or sale is long; (3) The production or sale amount is between 100,000 and 200,000 yuan, and the food is infant food; (4) The production or sale amount is between 100,000 and 200,000 yuan, and the person has previously received administrative punishment or criminal punishment for activities endangering food safety within one year; (5) Other circumstances that are serious.
According to data, the last incident of repackaging and selling expired milk powder that drew public attention dates back to 2016. At that time, Shanghai cracked a case involving the illegal processing and sale of expired imported baking dairy products from New Zealand, involving 276 tons of expired raw materials.
In that case, Shang, the legal representative and general manager of Jiangdi Company, decided to affix false production date labels to imported milk powder that had passed its expiry date and sell it in bulk to other units and individuals. Some was repackaged into small packages and sold online to obtain illegal profits.
On August 30, 2017, the Shanghai Third Intermediate People's Court sentenced Jiangdi Company to a fine of 4.3 million yuan for the crime of producing and selling fake products; Shang was sentenced to 15 years in prison and fined 300,000 yuan for the same crime; accomplices Zhang was sentenced to 7 years and Zhao to 3 years with a 3-year reprieve, along with corresponding fines.
A lesson from the past! We urge friends in the milk powder industry chain to stay clean, abide by the law, not earn money that goes against conscience, and actively report problematic milk powder clues to regulatory authorities.
Extended Reading:
While imported milk powder frequently faces "quality scandals," the share of domestic brands has been increasing year by year, and a watershed between Chinese and foreign brands in the milk powder market has emerged.
Two well-known French dairy companies have recently exposed food safety issues. On February 5, our newspaper reported that Angilande rice cereal from Sodiaal, France's largest dairy cooperative, had excessive E. coli and unqualified fat content, and had been sold in China without qualifications for 19 months. On February 3, Xinhua News reported that Lactalis, a French dairy giant, admitted that one of its factories may have been producing milk powder contaminated with Salmonella for over a decade.
In fact, in recent years, with increased supervision by the Food and Drug Administration on imported dairy products, imported dairy from Europe, Australia, Japan, South Korea, and other regions has frequently appeared on the "blacklist." At the same time, ten years after the "melamine incident," China's infant formula market has generally recovered, and the Chinese dairy industry has completed a transformative overhaul.
Zhu Danpeng, a Chinese food industry analyst, said in an interview with reporters that from an industrial structure perspective, the watershed between Chinese and foreign brands in the Chinese milk powder market has already emerged. Especially in 2017, Chinese dairy companies achieved high growth in mid-to-high-end products, indicating that Chinese dairy companies now have the strength to compete with foreign dairy companies. However, Zhu believes that compared with foreign dairy companies, Chinese national brands still have a long way to go.
In 2017, about 77 tons of imported milk powder were unqualified.
On February 1, dairy giant Lactalis admitted that the same type of Salmonella Agona was found in both the 2005 and 2017 problem milk powder incidents, and it cannot be ruled out that infants consumed problem milk powder produced during this period. This means that the source of contamination may never have been eliminated.
In fact, this is not the first time foreign dairy companies have exposed food safety issues. According to an announcement by the Import and Export Food Safety Bureau of the General Administration of Quality Supervision, Inspection and Quarantine, in December 2017, one batch of Mijia series infant formula, labeled as imported from Australia's FARMLAND DAIRY PTY LTD by Meizhigao Dairy (Jiangmen) Co., Ltd., was intercepted at a Guangdong entry port for failing to provide required certificates or qualified certification materials.
Statistics compiled by reporters show that in 2017, a total of 35 batches of imported infant formula were unqualified, weighing approximately 77 tons. If calculated at 800g per can, this amounts to about 96,250 cans. The origins involved include Australia, Switzerland, France, and other countries.
In addition, a 2016 CCTV survey showed that among 19 brands of infant formula from Germany, the Netherlands, the United States, New Zealand, Australia, Japan, and South Korea, 42% were unqualified. Among them, three US brands had iron content exceeding the upper limit of China's food safety standards; Japanese infant formula was found to have iodine content below China's standards; and two Japanese and two Korean brands were found to have selenium content not meeting China's standards. Additionally, 15.8% of the tested products had vitamin levels below standards.
The share of domestic milk powder brands is increasing.
2018 marks the tenth anniversary of the "melamine incident," and China's infant formula market has generally recovered. At the same time, the Food and Drug Administration has stipulated that from January 1 this year, infant formula produced in China or imported must obtain a formula registration certificate in accordance with the law, and the registration number must be indicated on labels and instructions.
According to the infant formula product formula registration catalog information released by the Food and Drug Administration on December 22, 2017, 40 formulas from 10 companies, including Ausnutria, Wandashan, Nanyang Sejong, Beingmate, Huadan, Huanenbao, and Yipin, were approved. To date, the National Food and Drug Administration has approved 1,040 formulas. This means that more than 120 companies with these formulas have obtained legal status in 2018.
A rough count by reporters shows that Beingmate has the most registered formulas, with 51. Companies with more than 30 (including) approved formulas include Feihe and Mengniu; those with more than 20 include Yili, Mingyi, Ausnutria, and Nestlé Wyeth; those with more than 10 include Junlebao, Health and Happiness, Mead Johnson, Synutra, Abbott, Danone, Yaolan, Yipin, Xi'an Yinqiao, Shaanxi Hesh Dairy, and Shaanxi Baiyue Youlishi.
Among foreign brands, Nestlé Wyeth has the most formulas, with a total of 20 approved formulas. Danone, Mead Johnson, and Abbott each have 10 or more formulas.
In terms of quantity, there are 192 formulas for imported milk powder produced in overseas factories, accounting for more than 20% of the total, while non-imported formulas account for 80%.
◎ Expert Opinion
China's dairy industry is entering a new stage of higher level and stronger strength.
According to CITIC Securities data, in 2015, users of original imported infant formula accounted for 64.2%, and in 2016, the ratio of overseas brands to domestic brands was 6:4. Additionally, it is reported that imported milk powder currently accounts for 45% of the Chinese market, while domestic brands account for 55%.
Zhu Danpeng stated that after ten years of efforts following the "melamine incident," and with the benefits of new regulatory policies such as the formula registration system, consumption upgrades, and the comprehensive two-child policy, China's infant formula market has generally recovered, and the Chinese dairy industry has completed a transformative overhaul.
"The entire formula registration system has purified the market environment, overall improved the industrial structure and entry barriers of China's infant formula industry, and provided orderly and benign regulation of the mixed milk powder market, playing a key role in the competitive landscape and order of the Chinese milk powder market." However, Zhu noted that there is still a gap between Chinese national brands and foreign dairy companies. From the consumer perspective, high-end milk powder is still largely occupied by foreign brands. Fortunately, some Chinese dairy companies are now moving into the mid-to-high-end market, and based on performance, they already have the strength to compete with mid-to-high-end foreign dairy companies.
In addition, Gao Hongbin, president of the China Dairy Association, pointed out that 2017 was a year of strong development for domestic milk powder, especially high-end products. In industry competition, a large number of domestic milk powder brands have regained a dominant position, and China's dairy industry has entered a new stage of higher level and stronger strength.