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Melamine scandal costs major Chinese dairy maker millions

(Xinhua)
Updated: 2008-10-30 16:45

SHANGHAI - One of the Chinese dairy companies implicated in the melamine contamination scandal says it lost millions in sales, refunds and recalls.

The Bright Dairy & Food Co Ltd, traded in Shanghai, reported Thursday its losses and added costs by the end of September amounted to 344.59 million yuan (US$50 million).

"The melamine incident threw the whole dairy industry into a difficult situation and has caused rather big impacts on the company," said Bright Dairy.

The company's third-quarter net loss was 271 million yuan, compared to 390 million yuan in profits from the same quarter a year earlier.

It expects to post full year losses this year, compared to 212.88 million yuan in profits in 2007, the report said.

Melamine is a chemical used to make plastics. It was found in dairy products including baby formula made in China. It has been linked to at least three deaths and caused 54,000 babies to get sick with kidney stones.

Other leading Chinese dairies, Mengniu and Yili, have yet to publish their Q3 reports, but executives of both companies said whole-year losses are in sight.

Sales of Mengniu and Yili plummeted by more than 90 percent in the first few days after the scandal went public. Sales have been gradually climbing back up, said Yili executive Zhang Jianqiu two weeks ago.

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