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The poisonous milk scandal in China involving one of New Zealand's biggest companies is spiralling out of control.
Chinese officials have confirmed three babies are dead and more than 6,000 sick after drinking the melamine contaminated milk. Of those, 158 are suffering from acute kidney failure.
New Zealand dairy giant Fonterra is part owner of the Chinese company, Sanlu, blamed for the toxic powder.
The panic over the safety of baby food is so great that thousands of parents in southern China have flooded into Hong Kong to buy foreign-made milk powder.
Fonterra fronted up to media on Wednesday afternoon.
"This is as bad as it gets for a food company," says chief executive Andrew Ferrier.
Ferrier gulped down water as he explained his company's soul searching over keeping the issue secret for six weeks.
"We're not worried about where we are going to be in China in six months time. We're worried about doing the right thing and this it what we've been doing since the second we learned about it," he says.
Two more men in China have been arrested in what Fonterra calls a criminal contamination.
At a small milking facility in northern China it's alleged the
men spiked milk with melamine to push up its protein level then
sold it to dairy giant Sanlu, a Fonterra subsidiary.
"It's how much milk they can get every day and then what they can
get for it . So for them there are incentives for sure to try to
make a bit of extra money by adding water and additives," says
David Oliver, an independent consultant.
The tainted milk is an embarrassing failure for China's product safety system which was overhauled to restore public confidence after dozens of recent safety scares.
"You can't test for every poison out there. You test for things that are known issues with respect to milk and to our knowledge there isn't a dairy company in the world that tests for melamine because it's not a naturally occurring substance in milk," says Ferrier.
The dairy giant says it will be a costly incident and isn't saying yet what it will do to help the thousands of families in China.
Fonterra's slogan is Dairy for Life. But right now thousands of babies are suffering from using products made by one of its subsidiaries.
