Case Study 1 - Sanlu Melamine-Tainted Milk Crisis in China
Sanlu Melamine-Tainted Milk Crisis in China Case Background Sanlu Group (“Sanlu” / “Shijiazhuang Diary Company”), founded in 1956. It was a state-owned Chinese dairy products company, and based in Hebei. It mainly sold milk products, powdered milk and infant formulas. Later, it become the largest infant formulas seller in China, as it provided quality control procedures and tests for the milks products. As the milk collection stations acted as an intermediary between Sanly and farmers, then, Sanlu can focus more on its core business, which is manufacturing dairy products and marketing. However, Sanlu involved in a milk scandal in 2008, then Sanlu declared bankruptcy and greatly reduced the customers’ confidence. How did the Sanlu milk crisis arise? In September 2008, Sanlu involved in a milk scandal, which was reported that its infant formula contaminated with melamine and those milk products contained melamine was available in the market. Melamine is an organi...