x Abu Dhabi, UAETuesday 25 July 2017

Dairy firms to pay compensation

Chinese dairy firms that sold tainted baby formula will make one-off cash payments to families of almost 300,000 affected children.

Chinese dairy firms that sold baby formula tainted with the industrial chemical melamine will pay compensation to the families of nearly 300,000 children who were killed or sickened as a result, state media reported. Twenty-two dairy producers will make one-off cash payments to the families, the Xinhua news agency cited China's Dairy Industry Association as saying today. It did not disclose the size of the payments or list the firms that would be making the payments.

However, Inner Mongolia Yili Industrial Group 600887.SS, Mengniu Dairy 2319.HK and Bright Dairy group 600597.SS are among the firms found earlier to have produced milk contaminated with melamine. "The enterprises offered to shoulder the compensation liability. By doing so, they hope to earn understanding and forgiveness of the families of the sickened children," Xinhua quoted the association as saying.

Chinese authorities have said at least six children died and about 294,000 were made ill earlier this year after they drank formula containing melamine. The scandal battered faith in Chinese-made products and led to recalls of Chinese-made diary products around the world. Sanlu Group, the company at the heart of the scandal, was made bankrupt as a result. Sanlu is partly owned by New Zealand's Fonterra group.

Six people have gone on trial for their part in the scandal, accused of producing, selling or buying the chemical to put in milk, as a way of cheating nutrition tests. *Reuters