Milk toxin scandal hits China CSR star

Public outcry and a debate about the meaning of Chinese CSR have been triggered by an award given to a dairy company that had just produced contaminated milk for the second time in four years.

There were widespread suspicions last month that a batch of Mengniu milk found to contain a toxic substance was being sold to the public, despite the company’s denials. Shortly afterwards, the company was awarded the Beijing Times Best Corporate Social Responsibility Award.

The company, which made more than $2bn (£1.28bn, €1.54bn) last year and is China’s largest milk producer, accepted the award, emphasising its “enthusiasm about public welfare, health and care delivery”.

However, its share price has plummeted amid boycotts and a public relations backlash from activists and hackers, who have branded Mengniu a ‘national disgrace’ on its own website.

The company had previously been involved in the 2008 melamine scandal that made 300,000 children ill and caused six deaths. The incident made food contamination a particularly sensitive CSR issue in China.

As CSR awards continue to proliferate in Europe and the US, their meaning has been under scrutiny – public and investor cynicism over the burgeoning Chinese awards scene may have been permanently intensified by this event.

The Beijing Times is itself in trouble this month after its general manager was sacked for accepting bribes from a furniture company to conceal another corporate scandal.