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CHINA: Chinese Dairies Agree to Pay $160 Million to Tainted-Milk Victims

by David Barboza New York Times
December 30th, 2008

A group of Chinese dairy companies blamed for selling contaminated milk that killed six children and sickened nearly 300,000 others earlier this year has agreed to pay $160 million in compensation to the victims and their families.

A spokeswoman for the China Dairy Industry Association said Tuesday by telephone that a fund had been established for the victims and that the payments would be made. Liu Meiju, the secretary general of the association, declined to give further details.

But China’s state-controlled media reported earlier this week that a group of 22 dairy companies would make one-time payments to the families of the victims.

The settlement would amount to about $550 per victim, which is the equivalent of about three months of wages for the typical factory worker in southern China.

The association has also agreed to make payments to care for victims who suffer from long-term effects from the poisonings, according to Xinhua, the official Chinese news agency.

Several lawsuits have been filed by families of the victims, but none of them have been accepted by Chinese courts.

The case, however, has drawn the attention of China’s top leaders, who have vowed to improve food safety.

Last September, some of China’s largest dairy producers were accused by the government of selling milk contaminated with melamine, an industrial chemical that is believed to cause kidney stones and other ailments.

In recent days, more than a dozen dairy middlemen have been charged with endangering public security in the northern province of Hebei and put on trial. They have been accused of intentionally contaminating dairy products in order to reap bigger profits.

Because melamine is high in nitrogen, experts say, it can be used to artificially inflate protein readings on milk powder. In fact, some dairy producers and middlemen have admitted to using melamine as a cheap substitute for real milk powder.

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