Tens of thousands of Babies Hospitalized With Melamine Poisoning

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China Milk Scandal Spreads; Hong Kong Girl Sickened (Update2) By Lee Spears and Wendy LeungSept. 21 (Bloomberg) -- Hong Kong authorities said a girl in the city developed a kidney stone after drinking Chinese milk containing the industrial chemical melamine, the first known illness outside mainland China linked to a spate of contaminations.Doctors found a stone in the three-year-old's left kidney when her parents took her for a checkup after learning the milk she'd been drinking for 15 months, made by Inner Mongolia Yili Industrial Group Co., may contain melamine, Hong Kong's Department of Health said in a statement yesterday.At least four children have died after consuming milk powder, liquid milk or yogurt containing melamine, a compound used in making plastics and tanning leather. The number reported hospitalized from milk powder increased almost ninefold to 12,892, with 104 in a serious condition, the official China Central Television said on its nightly news broadcast today. Hong Kong authorities have asked the city's doctors to report all cases of kidney illness suspected of being connected with the tainted milk.China and Hong Kong have set up hotlines for distributing medical information to concerned parents and recalled milk products that tests show may contain melamine. China's State Administration of Industry and Commerce had paid refunds for 304 tons of dairy products as of 9 a.m. yesterday, according to the official Xinhua News Agency. In China, 39,965 children have visited clinics after falling ill from the powder, CCTV said today.The Hong Kong girl, who wasn't identified, had been drinking as many as three cups a day of a high-calcium, low-fat Yili milk, the health department's statement said. She has been treated and discharged, it said.Scandal WidensChina's milk-contamination scandal was exposed on Sept. 11 when the Beijing-based Ministry of Health said it found melamine in baby formula made by Sanlu Group Co., a domestic producer that's 43 percent owned by Auckland, New Zealand-based Fonterra Cooperative Group Ltd. It's since widened to include 21 other Chinese dairy producers after tests found the chemical in 69 batches of formula and 24 batches of liquid milk and yogurt.Most of the hospitalizations to date were caused by Sanlu products, CCTV reported today, citing Ministry of Health statistics, without being more specific. There have been no reported cases of sickness caused by drinking liquid milk, CCTV said.China's three biggest dairy producers by market value -- Yili, China Mengniu Dairy Co. and Bright Dairy & Food Co. -- are among companies whose products contain melamine, according to the government.Threat to ExportsPlunging consumer confidence and increased spending on quality control in the aftermath of the scandal will erode earnings of Chinese dairy companies, said UBS AG and JPMorgan Chase & Co. Surging costs and government caps on price increases had already crimped profit margins.China's dairy market was expected to expand to $20 billion this year, from $18 billion in 2007, Euromonitor forecast before the melamine scandal.China's latest quality-control scandal may also further erode global confidence in exports the world's most-populous country depends on to help generate 10 million jobs a year. The nation's manufacturers are already grappling with reduced demand from their biggest overseas customers as growth slows in Japan, the U.S. and Europe.Punish `Anyone'Taiwan's Department of Health today ordered King Car Food Co. to recall eight of its products, including instant coffee and soup, that were made in Taiwan with mainland Chinese dairy ingredients. The company this morning notified Taiwan authorities that the products contained melamine, the health department's statement said.The U.S. is testing food, milk and milk-derived products including whey powder that may contain ingredients from China, the Food and Drug Administration said in a statement yesterday. The administration will also step up inspection at ports of entry to keep out tainted milk products, the Associated Press reported.China yesterday ordered widespread inspections of dairy companies and promised to punish ``anyone'' responsible. Companies will bear the costs of recalls and medical treatment for ailments caused by their products, the statement by the State Council said.China's Administration of Quality Supervision, Inspection and Quarantine is conducting inspections for melamine at 1,548 dairy companies, according to CCTV. Mengniu, Yili and Bright Dairy have issued statements apologizing to customers and pledging to step up quality controls.Three-Week DelaySuppliers of milk to the dairy companies sought to cut costs by diluting milk and then adding melamine, which makes the protein content appear artificially higher. Investigations showed that as many as 372 milk stations supplying Sanlu had been adding the chemical since as early as April 2005, Yang Chongyong, deputy governor of Hebei province where Sanlu is based, said on Sept. 17.New Zealand authorities took three weeks to notify China's central government after learning from Fonterra on Aug. 14 that its Chinese partner Sanlu may be using tainted milk, the New Zealand Ministry of Foreign Affairs and Trade said in an e-mailed statement yesterday.New Zealand relayed the news to China on Sept. 9. China announced a probe on Sept. 10, and the next day the Chinese Ministry of Health said milk powder made by Sanlu may cause kidney stones in infants.Fonterra Chief Executive Officer Andrew Ferrier last week said local officials in Hebei took too long to issue a public warning of the contamination.To contact the reporter on this story: Lee Spears in Beijing at lspears2=====In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. =====In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.