Mengniu production line in plant near Hohhot, Inner Mongolia
Mengniu was among those named for having powdered milk samples which tested positive for melamine. The company recalled tainted powdered milks and apologised to the public.[2]Trading in Mengniu shares on the Hong Kong Stock Exchange was suspended on 17 September.[3]Shares in other dairy companies fell strongly the next day.[4]On discovery that their liquid milk was also contaminated, Mengniu was stripped of its status as 'Chinese national brands'.[5]"This is not a situation of somebody innocently cheating just to try to make a little more money," said John Eldred, managing partner of law firm Keller and Heckman LLP in Shanghai. "They are doing it with an eye toward knowing they are cheating and knowing they are risking the health of the people who are using their products."[citation needed]The Washington-based firm specializes in food and drug regulation.
Mengniu, whose products tested negative in Hong Kong government tests, was immediately de-listed by supermarket chains after tests showed that contaminated samples had been found on the mainland.[6]Mengniu's CFO attempted to reassure consumers by offering a no-quibble refund on all products, and by drinking liquid milk in front of reporters. He also said that its export products were less likely to be contaminated. This comment spurred accusations on Internet bulletin boards that the company's preferential export policies was because it thought Chinese lives were cheaper than foreigners'.[7]
On 5 August 2008, the two largest shareholders, Yinniu[8]and Jinniu, sold HK$1.28 billion worth of shares through a placement, their fourth such sell-down since the company went public in 2004.
On 17 September 2008, Hong Kong Stock Exchange[9]suspended trading in shares of China Mengniu Dairy Co. Ltd.
On 23 September 2008, China Mengniu Dairy Co. Ltd. shares dropped 60 percent, the most since its debut in 2004, to HK$7.95 at the 4:10 p.m. close. Trading later resumed.[citation needed]Malaysia, Singapore, Taiwan and the Philippines have decided to pull Chinese dairy products off shelves.
In February 2009, there was controversy about the safety of usingosteoblast milk protein(OMP) in Mengniu's Milk Deluxe.
In 2011 Mengniu Dairy stated that moldy cattle feed led to excessive toxin levels in its milk.[10]
So what’s so special about Bellamy’s? For one thing, it still benefits from the long shadow of China’s 2008 tainted-milk scandal, when products including those made by Mengniu, its majority-controlled affiliate Yashili International Holdings Ltd., and arch-rival Inner Mongolia Yili Industrial Group Co. were found to have contained the toxic chemical melamine.
That’s made foreign-branded infant formula such a hot commodity in China that Australian retailers have had to implement maximum-purchase rules to stop the booming buy-overseas, post-back-home trade from clearing their shelves.
That’s not enough on its own, though, given the general headwinds. After all, Mengniu tried to capitalize on this trend back in 2015 when Yashili invested 1 billion yuan ($141 million) in a New Zealand factory. The mid- to high-end image of the Kieember and Kieevagour brands produced there clearly haven’t been a Bellamy’s-level success.
Yashili's plant is in ......Pokeno
A2M Price at posting:
$13.13 Sentiment: Buy Disclosure: Held
(20min delay)