KAI RYSSDAL: Federal agents searched the offices of ChemNutra and Menu Foods today. They’re the two U.S. companies tied to the distribution of tainted Chinese gluten in pet food here.
Meanwhile, the FDA has people on their way to China. They’ll be looking for signs of melamine contamination in the manufacturing process there. The Chinese government has promised to cooperate. Our Shanghai correspondent Scott Tong reports that’s probably because they’ve got more at stake than just pet food.
SCOTT TONG: The processed wheat and rice at the center of the pet food crisis is an increasingly vital part of China’s economy.
Chris Murck used to head the American Chamber of Commerce in Beijing. He says China relies less and less these days on growing grain, and more and more on processing it, with low-cost labor.
CHRIS MURCK: The Chinese will have a market advantage in the global processed food market. So it’s imported for their general strategy that this not be tarnished by this kind of incident.
There’s a risk of broader tarnishing as well. Will Hess of the forecasting firm Global Insight says China has staked a lot on its reputation as a global supplier.
WILL HESS: There have been a lot of resources dedicated towards improving the “Made in China” image. Trying to convince consumers that China is not a low-end producer. So for politicians in Beijing this is a very sensitive topic.
Those politicians say there’s no “clear evidence” the Chinese gluten killed American pets. Inside China, the state-owned media has been silent on the wheat gluten scandal. Food safety is a touchy issue at home, too. Three years ago, substandard baby formula caused a malnutrition crisis that killed 12 infants.
Again, Will Hess of Global Insight:
HESS: There’s a very broad range of products where market investigators have seen fake or substandard goods. This includes whiskey, tofu, eggs.
He says in small grocery stores in China as much as 40% of what’s on the shelves is suspect.
In Shanghai, I’m Scott Tong for Marketplace.
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