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The Chinese government is using the current tainted powdered baby formula scandal as a way to build sales and confidence in equivalent domestic products.

As reported here on MNB yesterday, both China and Russia have stopped importing some milk powder from New Zealand's giant Fonterra Cooperative Group after the company warned that some batches of the product made last year have have contained bacteria that can cause a rare illness called botulism.

Such products made abroad had been boosted by China's own food safety issues, specifically China-made powdered formula that was unsafe because of the presence of melamine.

But the Wall Street Journal reports this morning that now "Chinese state-run media have ramped up criticism of foreign baby formula ... The scare - for which Fonterra Chief Executive Theo Spierings on Monday apologized on a visit to Beijing - has given Beijing's efforts to help its own dairies a rhetorical shot in the arm. Beijing this year has intensified efforts to bolster a domestic industry hobbled by a 2008 tainted infant-formula scandal that killed at least six babies and hospitalized thousands of others, in one of China's most shocking food-safety scare."

In a related story, the Associated Press reports that China "has fined six milk suppliers, including Mead Johnson and New Zealand's Fonterra, a total of $108 million for price-fixing after an investigation that shook the country's fast-growing dairy market ... The investigation reflected intensifying scrutiny of business under China's 5-year-old anti-monopoly law. Most targets so far have been foreign-owned. It was carried out against the backdrop of Chinese probes of possible bribery and other misconduct by global suppliers of pharmaceuticals and other products."
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