Alleged scandal could worsen consumer confidence in wake of coronavirus.
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If the alleged scandal over infant formula turns out to be true, it will further dent consumer confidence in China, which has already been shaken by the coronavirus pandemic. © AP

The Hunan provincial government is investigating allegations of a protein drink being sold as milk formula, after parents complained about symptoms of malnutrition in their babies.

The formula, known as Bei An Min, was sold at baby product retailer Love Baby’s Workshop in the city of Chenzhou, in the south of the province.

State media Xinhua reported on Thursday that Hunan’s Administration for Market Regulation had received five complaints so far, and it was investigating the businesses involved while carrying out free health checkups for the affected infants.

This comes as the central government in Beijing is closely monitoring any health-related issues as part of measures to curb a second wave of coronavirus infections. Addressing a key leadership meeting on Thursday, President Xi Jinping vowed to never “allow our hard-earned previous achievements on epidemic control to [have been] made in vain.”

Many parents in the country remain wary of food safety after a formula scandal involving the illegal use of melamine that resulted in hundreds of thousands of babies being poisoned in 2008. An underground supply chain later emerged as demand for imported formula rose, with Chinese parents preferring foreign brands to local ones because of safety and quality issues.

But the ensuing rush for imported brands emptied shelves, raising the ire of local consumers, and prompting authorities in Hong Kong and Australia to put a cap on purchases. Despite the premium on imported formula, the majority of Chinese families rely on this method, rather than on breast milk, to feed their infants.

Bei An Min is the product of little-known local company, Hunan Waverock Health Products. Attempts to contact the five-year-old company went unanswered. Besides its protein drinks, the company also deals with infant formula milk and health food.

Phoenix New Media identified Xiao Shihu as its controlling shareholder. Xiao is also a chairman of Hunan Meiyougao Dairy, a subsidiary of Hong Kong-listed Ausnutria Dairy Corp., shares of which fell by 5.2% on Friday.

Local media posted screenshots of Hunan TV, which reported cans of Bei An Min labelled as ‘deep hydrolysis protein and lactose-free formula powder’. It also showed an image of a three-year-old boy with a swollen skull, allegedly developed after consuming Bei An Min formula.

If the allegation is proven to be true, it is likely to shake consumer confidence further at a time of subdued retail spending as China is only just returning to normal following the coronavirus outbreak.

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