Crime link to tainted milk

Chinese gangs may be behind melamine use

Organised criminal gangs could have been behind the tainted milk that brought down Fonterra's Chinese venture, government documents reveal.

At least four babies died of kidney failure and 54,000 were poisoned after consuming milk formula tainted with the waste chemical melamine, which was added to raw milk to increase protein content.

Fonterra's joint partner SanLu was the first company implicated in the practice, which has led to the investigation of 37 other companies and several arrests.

The papers, prepared by Foreign Affairs officials and released to The Dominion Post under the Official Information Act, show Prime Minister Helen Clark and ministers were briefed on links with organised crime on September 5.

A memorandum from the embassy in Beijing to head office in Wellington, dated August 31, said there was "no suggestion that SanLu itself is responsible for adding the melamine".

The report, parts of which were deleted before being released, said it appeared the Chinese petfood scandal in the United States last year had led to a "crackdown" on melamine use in that industry.

This meant melamine producers in China "required other outlets".

The briefing paper to Miss Clark and the foreign affairs, agriculture and food safety ministers on September 5 said China's milk supply had been "targeted by Chinese organised crime" and all SanLu products had been affected, including whole milk power, skim milk powder and infant formula.

However, a Beijing-based journalist for a Western news outlet said claims that criminal gangs were behind the melamine were dubious.

"That's a line that Fonterra and the embassy have been putting out but this is just too widespread to be the work of a few criminals."

A spokeswoman for the prime minister told The Dominion Post initial reports suggested organised crime might have been involved, but officials were "not certain".

"It was widely apparent that criminal activity was involved, as subsequently there were arrests within the company and at milk collection centres."

She denied ministers had kept the possible link quiet to avoid offending the Chinese Government.