We can advise about the extensive legal framework of consumer protection in China and assist you in dispute resulting thereof. We can also advise and assist you in Switzerland.
Basé à Wuhan, l’un des fabricants d’ingrédients au service de Nestlé fait l’objet d’une surveillance accrue des autorités et des médias chinois, dans un pays encore marqué par le scandale du lait contaminé de 2008. Source : https://www.letemps.ch/economie/lait-infantile-contamine-un-fournisseur-chinois-de-nestle-dans-le-viseur
John Liebeskind and his team performed the reputation & risk due diligence of a Chinese group borrower on the request of a Geneva bank which was part of the lender’s syndicate for a multi-million loan and advised the bank about the extent of its obligations. The DD revealed that the target had been fined repeatedly …
In 2008 it emerged that several Chinese dairy firms had adulterated raw milk and infant formula with melamine, an industrial chemical rich in nitrogen that artificially boosts measured protein levels in quality tests. The contamination caused kidney stones and other kidney damage in hundreds of thousands of infants, and Chinese authorities ultimately acknowledged six baby deaths linked to the tainted milk. The core culprit was Sanlu Group, a major Chinese producer of infant formula, but testing quickly showed that products from many domestic dairy companies were affected.
Nestlé was not one of the Chinese firms found to have deliberately adulterated milk with melamine, and it publicly stated that its products in China were not made from melamine‑adulterated milk. However, as the scandal widened, authorities in places such as Taiwan and Hong Kong detected small traces of melamine in certain Nestlé powdered milk or related dairy products that used Chinese milk ingredients. In Taiwan, six products under the Neslac and KLIM brands were delisted after tests showed minute levels of melamine, with local authorities saying the amounts did not pose a significant health risk. In Hong Kong, Nestlé recalled at least one milk product as a precaution after local testing in the context of the broader Chinese dairy crisis.
The scandal triggered import bans and heightened scrutiny of Chinese dairy exports by many countries and organizations, including a strong condemnation from the World Health Organization. Foreign brands, including Nestlé, faced intensified testing and sometimes precautionary withdrawals of products tied to Chinese milk supply chains, even when detected melamine levels were low.
Nestlé’s milk powder sales in China fell 18% in Q4 2008 due to the scandal, contributing to direct economic losses estimated over $230 million (about CHF 250 million at the time). Maternal-infant channel sales in tier-one cities dropped 52%, and brand reputation declined 23 percentage points. The losses encompassed recall costs, lost sales revenue, and related disruptions in Nestlé’s Chinese milk powder business. Domestic giants like Mengniu posted a 949 million yuan ($139 million) net loss in 2008. Industry-wide dairy sales in China fell 30-40%, with the Chinese Dairy Association estimating total financial effects at RMB20 billion (almost $3 billion).
Consumer rights are protected in China by a vast legal framework whose main components are the Consumer Protection Law, the Product Quality Law, the Advertising Law, the Pricing Law, the Anti-unfair Competition Law, and industry specific laws and regulations. Recently these laws have been comprehensively extended to online transactions. Their scope, the way they relate to each other and may overlap, which authority is competent for what, which license is need for what is complex is complex and often unclear. Yet, ignoring them comes at one’s peril, sometimes at a hefty cost, as experience tells.
In 2008 it emerged that several Chinese dairy firms had adulterated raw milk and infant formula with melamine, an industrial chemical rich in nitrogen that artificially boosts measured protein levels in quality tests. The contamination caused kidney stones and other kidney damage in hundreds of thousands of infants, and Chinese authorities ultimately acknowledged six baby deaths linked to the tainted milk. The core culprit was Sanlu Group, a major Chinese producer of infant formula, but testing quickly showed that products from many domestic dairy companies were affected.
Nestlé was not one of the Chinese firms found to have deliberately adulterated milk with melamine, and it publicly stated that its products in China were not made from melamine‑adulterated milk. However, as the scandal widened, authorities in places such as Taiwan and Hong Kong detected small traces of melamine in certain Nestlé powdered milk or related dairy products that used Chinese milk ingredients. In Taiwan, six products under the Neslac and KLIM brands were delisted after tests showed minute levels of melamine, with local authorities saying the amounts did not pose a significant health risk. In Hong Kong, Nestlé recalled at least one milk product as a precaution after local testing in the context of the broader Chinese dairy crisis.
The scandal triggered import bans and heightened scrutiny of Chinese dairy exports by many countries and organizations, including a strong condemnation from the World Health Organization. Foreign brands, including Nestlé, faced intensified testing and sometimes precautionary withdrawals of products tied to Chinese milk supply chains, even when detected melamine levels were low.
Nestlé’s milk powder sales in China fell 18% in Q4 2008 due to the scandal, contributing to direct economic losses estimated over $230 million (about CHF 250 million at the time). Maternal-infant channel sales in tier-one cities dropped 52%, and brand reputation declined 23 percentage points. The losses encompassed recall costs, lost sales revenue, and related disruptions in Nestlé’s Chinese milk powder business. Domestic giants like Mengniu posted a 949 million yuan ($139 million) net loss in 2008. Industry-wide dairy sales in China fell 30-40%, with the Chinese Dairy Association estimating total financial effects at RMB20 billion (almost $3 billion).
Consumer rights are protected in China by a vast legal framework whose main components are the Consumer Protection Law, the Product Quality Law, the Advertising Law, the Pricing Law, the Anti-unfair Competition Law, and industry specific laws and regulations. Recently these laws have been comprehensively extended to online transactions. Their scope, the way they relate to each other and may overlap, which authority is competent for what, which license is need for what is complex is complex and often unclear. Yet, ignoring them comes at one’s peril, sometimes at a hefty cost, as experience tells.