China Modern Dairy stock falls amid tuberculosis probe
Authorities look into claims that several cows sold by the firm's unit were infected
Chinese authorities are probing reports a unit of China Modern Dairy sold milk cows that tested positive for tuberculosis, the latest food scandal to hit the country and sending shares of the raw-milk producer to its lowest in more than a year.
The reports alleged several of 94 dairy cows sold by the subsidiary in an auction tested positive for bovine TB, while some tested positive to a brucellosis antibody serum test, Maanshan-based China Modern Dairy said in a statement to the Hong Kong Stock Exchange.
Humans can contract TB by drinking unpasteurised raw milk from infected cows.
The mainland's dairy industry has struggled to regain consumer confidence since a melamine-tainted milk scandal that killed six infants and sickened 300,000 in 2008. Mainland consumers have been hit by abuses that included fox DNA found in donkey meat sold by Wal-Mart stores and a McDonald's food supplier repackaging expired meat.
"This is an isolated incident and not an epidemic by any stretch of the imagination," Jeremy Yeo, an analyst at Mizuho Securities, wrote in a note to clients, citing a conference call with Modern Dairy. It won't lead to a massive product recall as milk pasteurised under high heat kills such germs and bacteria, making it safe for drinking, Yeo wrote.
Sick cows aren't allowed to produce milk for commercial use, he said, citing the company.