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Dairy Product Companies’ Stock Prices Plunge Due to Latest Baby Milk Powder Scandal

On May 15, BBC Chinese reported that at least five children in Hunan Province, after drinking a protein beverage that is said to be suitable for babies, became “big headed dolls” with deformed skulls. They even beat their heads abnormally. Chinese authorities said on Thursday that the relevant merchants are suspected of “fraud” and will be severely punished. It was recommended these babies were  to drink a type of special medical milk powder. It was supposed to be for babies who are allergic to ordinary formula milk powder or are suffering from special diseases. In reality, the milk was no different from a protein drink. The false advertising led to malnutrition among the babies.

Sina reported on May 16 that the share price of a number of dairy product companies in China dropped. Among them, Flying Crane International Inc. (中国飞鹤) suffered the largest impact. Its stock price fell 10.22 percent, a loss of HKD 16 billion (US$2 billion).

BBC Chinese, May 15, 2020
Sina, May 16, 2020