2008 Chinese Milk Scandals

2008 Chinese milk scandal was one of the major events that happened in China. June 28, 2008, the first case of infant with kidney stone occurred in Lanzhou. In the following two months, the number of infants diagnosed with kidney stones had increased to 14 in one of the hospitals in Lanzhou. The only thing in common before those infants got sick was that they had fed on milk powder produced by Sanlu Group for a long time. Gradually, the same cases happened in the other provinces in China. The scandal became public on in August 2008 with the disclosure of the chemical additive called melamine in the dairy products produced by Sanlu Group. This chemical substance caused kidney failure of many infants, even death. Later, through the investigation by the Chinese government, melamine was found in the products of 21 other Chinese dairy companies. Those firms were forced by the Chinese Health Ministry to recall the substandard products and destroy the unsold and recalled products. Mengniu, a leading dairy manufacturer, was also one of those companies. Sanlu went bankrupt in the beginning in 2009 while Mengniu survived this scandal.

As a result of this scandal, many countries banned selling and importing Chinese dairy products. There was no doubt that this scandal did Mengniu brand’s reputation a lot of harm, even the reputation of China had been influenced. Gary Hufbauer, a senior fellow in the Peterson Institute for International Economics said that” This is very distressing for Chinese sales of food products of any kind. It may be milk here, but who know what it could be later.” Mengniu recalled tainted milk powders and apologized to the public. It monitored the entire production of milk more strictly, invited major dealers to visit the production department, and took some sales promotion activity for the high-qualified milk, in order to rebuild the image of Mengniu products in the minds of consumers and distributors. It had successfully rebuilt its reputation after the industry-wide tainted milk scandal. Mengniu had adopted many new forms to undertake social responsibility, for example, it donated money for the “511 earthquake” in China, the most significant one it involved in was a large scale green welfare activity called” Ecological action supports China”.

Consequently, Mengniu won the award of 2011 China Corporate Social Responsibility because of its consistent contribution to social responsibility. Nowadays, with the development of the technology and new media, it is a fact that corporations have to face more challenges and risks when they are trying to build, maintain and protect their reputation. Mengniu had suffered from other ethical dilemmas. The most recent credit crisis was the cancer-causing milk. Mengniu Dairy Group said it found milk containing high levels of aflatoxin, which can lead to liver cancer. After the disclosure of that fact, a hacker team hacked Mengniu’s website by putting up a black screen with text condemning Mengniu. The text wrote that” the national shame”, “we are family, but you poison us…on behalf of millions of netizens, we make the move to wake you up, wake the whole nation up”.

As a leading food company in China, its major social responsibility is to ensure products quality and safety. Facing this dilemma, Mengniu apologized to consumers and stated that all products found unqualified had been destroyed in the warehouse before distribution. They attributed this ethical issue to the mildewed fed cows. “This even reflects Mengniu’s incompetence at production and quality control. No matter which areas the causes lie in, Mengniu is inescapably responsible,” said Dr. Yun Wuxin. Obviously, Mengniu’s behavior goes against business ethics and it fails to take its basic social responsibilities this time, any excuse for that is useless. Their poisonous products had damage the brand image again.