09/02/10: China Shuts Ice Cream Makers for Tainted Milk Powder

China shut three ice cream makers in the northern province of Liaoning for using materials tainted with the chemical melamine as the government widens its scrutiny of dairy-based products.

Citing the Liaoning’s health bureau, Wuzhou Foods Ltd, Liaoning Yachao Foods Ltd. and Yingkou Aoxue Foods Ltd. were shut after melamine was found in milk powder meant for use in ice cream production.

China has recalled more than 170 tons of milk powder, arrested three people in Shaanxi province and shut factories nationwide after discovering that melamine-tainted milk powder suppose to be destroyed in 2008 had instead been redistributed. The recalls may undermine efforts to rebuild consumer confidence after tainted milk powder killed at least six babies in 2008.

“Incidents like these may be the last straw for consumers’ confidence in Chinese-made milk powder,” Jenny Chan, an analyst at Bank of China Ltd., said by phone from Hong Kong. January milk powder imports surged as the scandal widened, she said.

Melamine is a chemical used in the production of plastics that can also be used to make protein levels in watered-down milk appear higher. Milk powder tainted with the chemical killed at least six babies and sickened about 300,000 others in 2008, according to government figures.