September 24, 2008 / 1:09 AM / 11 years ago

China liquor maker denies cancer-causing material

SHANGHAI, Sept 24 (Reuters) - Top Chinese spirit maker Kweichow Moutai (600519.SS) on Wednesday denied internet reports its products contain cancer-causing sodium nitrate, after tainted infant milk powder made over 54,000 children sick in China.

Major wine producer Yantai Changyu Pioneer Wine (000869.SZ) (200869.SZ) also made a similar statement after some financial internet portals, including www.cfi.net.cn and www.p5w.net, published market talk that the cancer-causing material had been found in products in Moutai, Changyu and a few breweries.

"Such reporting is completely based on rumours," Moutai said in a filing to the Shanghai Stock Exchange. "We hope media will not publish or spread this talk any more."

Changyu in a filing to the Shenzhen Stock Exchange said it was impossible for it to add sodium nitrate in wine production.

Moutai's local-currency A shares closed down 9.43 percent at 120.31 yuan ($18) on Tuesday and Changyu's plunged their 10 percent daily limit to 49.23 yuan, sharply underperforming the market's .SSEC 1.56 percent drop.

Milk powder laced with the industrial chemical melamine has led to nearly 13,000 Chinese infants being admitted to hospital, 104 in a serious condition with kidney stones and agonising complications. Four have died in past months. ($1=6.8135 Yuan) (Reporting by Lu Jianxin; Editing by Sanjeev Miglani)

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