Global Companies Hurt by Melamine Scare

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Many of the news reports about Chinese food products tainted with the industrial chemical melamine make sure to mention that U.S. consumers are safe, since the United States doesn’t import dairy products from China.

But that doesn’t mean U.S. companies, along with companies around the world, are safe.

On Monday, the British candy maker Cadbury has recalled all of its Chinese-made candy products because of possible contamination.

Last week, the H.J. Heinz Co. said it had recalled several dozen cases of its Many Many Vegetable Cereal baby food in Hong Kong because trace amounts of melamine were found.

Yum Brands-owned Pizza Hut pulled packets of grated cheese from its restaurants after the product proved to have been tainted.

Also last week, the Food and Drug Administration announced the recall of some instant coffee and tea drinks that contained nondairy creamer made in China.

Even companies that haven’t been directly affected are working feverishly to protect themselves from potential fallout. Starbucks has removed milk from stores in China, replacing it with soy milk. Kraft felt the need to issue statements that its Oreo cookies do not contain dairy ingredients from China. And McDonald’s announced that the ice cream it sells in China does not contain melamine.

Tags: H.J. Heinz Co., Kraft Foods Inc., McDonald's Corp., Starbucks Corp., Yum! Brands Inc., China, Food, Food & Beverage, Manufacturing, Dan Mitchell

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1

winteroak

09/30/08 | Report as spam

RE: Global Companies Hurt by Melamine Scare

China is a corrupt country to begin with, therefore everything that happens there is either wholly or partially state sponsored, so little action could be expected in this regard. as to multi national corps being hit by trade malpractices, its entirely up to them how they wish to react to the situation, astute diligence is needed to operate in countries like China, where the state might react in a totally unpredictable manner & hence affect the health & profitability of these companies. Corporate governance & transparency anyway are subjects of little or no importance in china
2

telecomtech1@...

10/01/08 | Report as spam

RE: Global Companies Hurt by Melamine Scare

I think all manufacturing and products should be brought back to U.S.A. along with any banking.

We are a self supporting country and why are we dealing with a communist country in the first place?

They need US money more than we need their services!
3

kennoath

10/06/08 | Report as spam

RE: Global Companies Hurt by Melamine Scare

Actually, counties like the US are very, very far from 'self supporting'.
We have relied on low-cost production and manufacture in countries like China for many decades.
The US economy can't afford to lose low-cost producers - it is hard for American companies to produce basic goods economically. If low-cost sources disappeared, so would many large US firms.
This sort of thing should work itself out, hopefully. Chinese authorities will realise that losses in export that result from these incidents are not worth it. Looking at the sort of sentences they hand down to people responsible for big failures, perhaps they are getting that message loud and clear.

PS: Re the US being self-supporting, note that if offshore interests (including the Chinese Government) weren't pouring money into the US to help stabilise its economy, the US would have entered an unprecedented free-fall before the US Government even started to talk about a bailout package.