China milk scandal firm asked for cover-up help

By Ben Blanchard

BEIJING (Reuters) - A Chinese company at the center of the scare over tainted milk powder had asked for government help to cover up the extent of the problem, state media said on Wednesday in the newest development in the widening scandal.

In the Communist Party newspaper the People's Daily, Shijiazhuang city government spokesman Wang Jianguo said they had been asked by the Sanlu Group for help in "managing" the media response to the case when first told of the issue on August 2, six days before the opening of the Olympic Games in Beijing.

China's latest food safety problem, involving the addition of the industrial chemical melamine to milk to cheat in quality tests, has caused public outrage and put the spotlight back on deficiencies in industry oversight and weak regulatory bodies.

China has already said the city government in Shijiazhuang, home to the Sanlu Group whose contaminated milk sparked a recall now spread worldwide, sat on a report from the company about the tainting for more than a month, while Beijing hosted the Olympic Games.

"Please can the government increase control and coordination of the media, to create a good environment for the recall of the company's problem products," the People's Daily cited the letter from Sanlu as saying.

"This is to avoid whipping up the issue and creating a negative influence in society," it added.

This week, Reporters Without Borders said Beijing had ordered news of the scandal hushed up ahead of the Olympics.

"Several Chinese journalists have said that it is becoming more and more obvious that the authorities in July prevented an investigation into the toxic milk coming out so as not to tarnish China's image before the Olympics," it said in a statement.

Thousands of children fell ill after drinking the milk, and four died. But the rush of people taking their children to hospital for check-ups appears to be slowing, Xinhua news agency said.

"The work involved with offering free check-ups has turned from an emergency situation to normal," it quoted Wen Honghai, Shijiazhuang's top health official, as saying.

BUNGLING

Countries around the world have banned Chinese dairy imports, or ordered them to be taken off shelves, as it became clear yoghurt and other products were also affected.

Scores of foreign companies have been forced to recall products made with Chinese dairy ingredients, or to reassure customers their goods are safe.

Dairy sales in China dropped too, though Commerce Minister Chen Deming told Xinhua in an interview that sales had begun to bounce back as consumer confidence returned.

"Generally speaking, the sales situation for dairy products around the country has taken a turn for the better," he said.