OFF THE SHELVES: An employee removes tainted milk powder from a supermarket in Hefei, capital of Anhui Province (CHEN YEHUA)

The milk powder scandal, which has made thousands of children ill and panicked parents, is under investigation and will likely reshuffle China's dairy industry.

Melamine-tainted formula has killed four infants and caused urinary tract problems, including kidney stones. About 13,000 children remained hospitalized last week, with 104 in serious condition.

Premier Wen Jiabao asked for an overhaul of the domestic dairy industry at an executive meeting of the State Council on September 17. Officials at the meeting also promised to provide medical treatment for sick infants. Hospitals nationwide have set up a free screening program.

All the milk products in the market underwent tests after the tainted milk powder was reported. According to the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), 69 batches of milk products made by 22 dairy companies, including well-known brands Sanlu, Yili, Mengniu and Yashili, were found to contain melamine, a toxic industrial chemical used to make plastics and tan leather. Sanlu milk powder, which contained 2,683 milligrams of melamine per liter, ranked highest by far.

On September 19, health inspectors said they also found melamine in some liquid milk and yogurt, with Bright Dairy liquid milk containing the highest amount at 8.6 milligrams per liter. AQSIQ said no hospitalizations related to liquid milk have been reported so far.

On September 17, AQSIQ revoked the "Famous Brand" titles for the well-known milk companies, including Mengniu, Yili and Bright, and cancelled many national inspection exemptions that food producers previously enjoyed.

The scandal has brought down several high-ranking officials, including AQSIQ Director Li Changjiang, who resigned on September 22. Three officials in Shijiazhuang, capital of Hebei Province, Party Chief Wu Xianguo, Mayor Ji Chuntan and Vice Mayor Zhang Fawang, also stepped down after locally based Sanlu Group became the epicenter of the scandal.

Jumping into action

The scandal illuminated existing problems in China's dairy industry and food safety system. Milk farmers sell their product at a relatively low price to milk providers, who then sell it to milk companies at a higher price. To boost their profits, some milk providers diluted the milk with water and added melamine, which made the milk appear rich in protein in order to pass nutrition tests.