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Day of reckoning

(China Daily)
Updated: 2008-12-26 07:51

The bankruptcy petition by Sanlu, the notorious dairy firm at the center of a tainted milk scandal that killed six babies and made another 294,000 children sick, was long overdue.

When this major culprit goes belly up, other dairy firms also found to be involved in the scandal should not shy away from owning up to their responsibility.

The case of Sanlu should serve as a perpetual warning to not only Chinese dairies but also other enterprises that stop at nothing to pursue profits.

A Shijiazhuang court has accepted Sanlu's bankruptcy petition. According to the Shijiazhuang municipal government, the dairy firm had a net liabilities of 1.02 billion yuan ($149 million) by the end of October, including a loan of 902 million yuan with which it had to pay the medical bills for and compensation to the victims.

Given the dire consequences of the milk scandal, no one will expect this dairy firm to continue to survive. Chinese consumers are so scared that it is natural for them to consider "Sanlu" a synonym for unsafe food. In fact, since Sanlu admitted in September that it had sold milk powder tainted with melamine, an industrial compound, causing kidney stones and other complications in children, its days were already numbered.

However, the imminent demise of Sanlu does not represent the end of the day of reckoning for the company itself or other problematic dairy companies.

To restore Chinese consumers' confidence, other dairy giants must do more than attend oath-taking ceremonies to demonstrate their professional ethics. To start with, they should give public and unconditional support to the compensation scheme for families of sick and dead babies the Ministry of Health is working on.

The sum of compensation will not - and should not - be small. In the case of Sanlu, it amounted to be not the last straw but a mountain of debt that broke the camel's back.

Other dairy giants may find the compensation higher than they expected. They are now caught between a predictable dip in demand with many consumers scared away from the market for the moment and a deepening global economic slump.

Nevertheless, for consumers, the dearer the price dairy giants pay for the tainted milk scandal, the more convincing is their promise about business ethics and food safety.

(China Daily 12/26/2008 page8)