China milk scandal firm asked for cover-up help

(Adds statement from Mars, paragraphs 9-10)

By Ben Blanchard

BEIJING, Oct 1 (Reuters) - A Chinese company at the centre of a 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 a widening scandal.

China's latest food safety problem, involving the addition of the industrial chemical melamine in 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.

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

"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 paper cited the letter from Sanlu as saying.

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

Thousands of children fell ill after drinking the milk, and four died. 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.

U.S. confectioner Mars Inc. said in a statement that independent tests confirmed none of its products, including M&Ms, Snickers and Dove chocolate products, contained any melamine.

"Mars's domestic suppliers of milk powder own and control the pipeline from milk production to milk collection to milk processing, without interference by traders or other middlemen," it said in a statement.

BUNGLING

China has a poor record when it comes to ignoring or glossing over bad news. In 2003, it initially tried to cover up the spread of the respiratory disease SARS.

But Wang, who did not say whether the government complied with the media control request, defended the actions of his colleagues, who he said did send a team at once to probe Sanlu and look for those suspected of adulterating the milk.

"Yet it was not until Sept. 9 that it was reported to the Hebei provincial government," the newspaper said, referring to the province where Shijiazhuang is situated.

Beijing has already fired several Shijiazhuang officials, including the city's Communist Party chief, for the attempted cover-up.

Wang said the city government had not considered the consequences of their actions.

"We mistakenly thought that taking necessary measures and raising product quality could mitigate the effect and reduce losses," he said.

"The bungling of the best opportunity to report up the handling of the issue caused much harm to people's safety, and seriously affected the image of the Party and the government," Wang added.

He also expressed "deep guilt and pain" for the scandal. (Additional reporting by Susan Fenton in Hong Kong; Editing by Alex Richardson)