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Chinese Companies Pay $160 Million Over Melamine Scandal

Dairy companies settle with families of sickened children

By Lisa Wade McCormick
ConsumerAffairs.com

December 30, 2008

• Virginia Child's Kidney Problems May Be Due to Melamine-Tainted Candy • Chinese Companies Pay $160 Million Over Melamine Scandal • Topaz Wafer Rolls Recalled on Melamine Fears • Melamine Triggers Recall of Cocoa from Canada • Vietnam Company Recalls Biscuits Due to Melamine • USDA Will Test Meat Products for Melamine • Melamine Found in Walgreens Chocolate Bars • Chinese Infant Death Toll from Tainted Formula Rises • Some Melamine in Infant Formula is OK, FDA Says • FDA Finds Melamine in U.S. Infant Formula • FDA Blocks Chinese Products Over Melamine Fears • Melamine Scandal Continues to Expand • FDA's Melamine Decision Scares Consumers • DeLauro Raps FDA On Melamine Risk Guidelines • FDA Issues Report On Melamine and Food Safety • Melamine-Tainted Chinese Candy Shows Up in U.S. • Hershey's Says Chocolates Are Safe from Chinese Melamine Scandal • Cadbury Recalls Chinese-Made Chocolates Due to Melamine • Melamine Scare Spreads to Mr. Brown Coffee • Chinese Gorillas Fall Ill as Melamine Scandal Widens • FDA Updates Chinese Infant Formula Warning • Asian Baby Death Toll From Infant Formula Rises • FDA Issues Warning on Chinese-Made Infant Formula

Twenty-two Chinese dairy companies--whose melamine-tainted milk products are blamed for the deaths of at least six infants and the illnesses of 294,000 other children in that country--have agreed to pay $160 million to the victims' families, according to China Daily and and other news agencies.

The agreement comes shortly after the trials started for 15 people in connection to the China's melamine-tainted milk scandal.

Victims of the country's milk scandal will now share a one-time cash payment of $131 million from the companies involved, according to China Daily. The remaining $29 million is earmarked for medical bills associated with lingering health problems, Guangzhou Daily reported, citing an unnamed source from the China Insurance Regulatory Commission.

Under the agreement, families whose babies died from the tainted milk will each receive $29,000, China Daily reported. Families whose children became seriously ill will receive about $4,400 each. And those whose children suffered minor kidney problems from the tainted milk will each receive $292.

At least four of the suspects involved in the melamine-tainted milk scandal could face the death penalty, the official Xinhua News Agency reported.

Those defendants face charges of endangering public safety for allegedly producing and marketing 200 tons of a mixture of melamine and malt dextrin — a food additive made from starch — to milk producers, according to state news reports.

Earlier this year, Chinese officials discovered melamine in powdered infant formula made in that country. Melamine is chemical used to make plastic and fertilizers.

Authorities learned some Chinese dairy plants added melamine to milk products to make them appear to have higher protein levels.

Those reports stated that between November 2007 and August 2008 the defendants sold 110 tons of the tainted mixture to milk producers, which generated $180,000 in sales.

One of the milk producers that received the tainted mixture was the Sanlu Group Co. That's the dairy at the heart of the country's milk scandal.

The other defendants involved in the tainted milk cases face charges of producing and selling toxic food and making and selling melamine, according to news reports.

State news agencies said that Chinese officials hope the settlement and the trials of those involved in the contamination will end what many see as a national disgrace — one that put a spotlight on the country's problems with food safety and government and corporate misconduct.

Fallout from China's tainted milk scandal spread to dozens of other products sold around the world, including chocolates, yogurt, cookies, and coffee. Doctors say melamine can cause kidney stones and lead to kidney failure.

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