Mainland dairies whose products were contaminated with melamine have lost their prestigious 'quality check exemption' as the deepening scandal again puts the controversial scheme under scrutiny.
The scheme was introduced in August 2000 by the quality watchdog - the General Administration of Quality Supervision, Inspection and Quarantine - and exempts a wide range of products from rigid and routine inspections for three years if they pass three assessments in a row.
Most of the 22 companies whose baby milk formula was found to have been tainted were exempted in recognition of their high standards and consistent quality control.
But a lack of oversight has made the scheme increasingly irrelevant in terms of quality control. Indeed, the exemption has become more of a marketing tool for manufacturers.
On the list was Sanlu Group, whose products include the baby formula which first sparked the scandal involving melamine, a chemical added to milk before processing to raise protein levels for tests. Sanlu has been exempt since 2002.
Beijing-based lawyer Zhou Ze said the exemption scheme lacked a legal foundation, given that the country's product quality law did not endorse the practice.
Mr Zhou said the scheme was like a waiver for regulators to escape responsibility for maintaining quality standards, leaving it to manufacturers to regulate themselves. 'But [regulators] don't have the authority to free themselves of such responsibilities,' he said.
The sheer size of the scandal triggered fresh public calls for axing the scheme as it erodes public confidence and could further tarnish the made-in-China label.
John Bjorksten, president of Beijing-based public relations company Eastwei Relations, said every time a crisis occurred, it would have a negative impact on the whole industry and even the country, but it should be put in perspective.
Mr Bjorksten said people should continue to have faith in the made-in-China label, but Sanlu's response to the crisis was counterproductive. The public was dismayed by the perceived cover-up of the tainted milk formula scandal by Sanlu and government regulators, he said.
Rumours circulating online have also accused the company of trying to suppress bad publicity by trying to bribe a search engine to delete negative posts.
Mr Bjorksten said if the report were true, it would absolutely put 'the cart before the horse'.
He said speed and sincerity were the key elements in controlling damage and restoring consumer confidence, and it was still to be seen how swiftly the government and the companies would respond.
'A company's management team must let the public feel there is someone, someone with a conscience, trying to communicate and to deal with the issue,' Mr Bjorksten added.