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Supply Chain Issues in China’s Milk Adulteration Incident

Author

Listed:
  • Gale, H. Frederick, Jr.
  • Hu, Dinghuan

Abstract

China’s melamine milk adulteration crisis highlights the challenges that arise as large well-capitalized companies procure raw materials from a diffused supply chain of scattered small farmers and milk collection stations. As milk prices climbed sharply in 2007 and companies branched out into new territories, intense competition for raw milk supplies strengthened incentives to water down and adulterate milk. Effective food safety measures must account for incentives, the distribution of market power in the supply chain and market dynamics.

Suggested Citation

  • Gale, H. Frederick, Jr. & Hu, Dinghuan, 2009. "Supply Chain Issues in China’s Milk Adulteration Incident," 2009 Conference, August 16-22, 2009, Beijing, China 51613, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51613
    DOI: 10.22004/ag.econ.51613
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    Citations

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    Cited by:

    1. Chen, Chialin & Zhang, Jun & Delaurentis, Teresa, 2014. "Quality control in food supply chain management: An analytical model and case study of the adulterated milk incident in China," International Journal of Production Economics, Elsevier, vol. 152(C), pages 188-199.
    2. Ding, Huiping & Fu, Yanan & Zheng, Lucy & Yan, Zhu, 2019. "Determinants of the competitive advantage of dairy supply chains: Evidence from the Chinese dairy industry," International Journal of Production Economics, Elsevier, vol. 209(C), pages 360-373.
    3. Wang, Qingbin & Hansen, James & Xu, Fang, 2016. "China’s emerging dairy markets and potential impacts on U.S. alfalfa and dairy product exports," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235833, Agricultural and Applied Economics Association.
    4. Retsef Levi & Somya Singhvi & Yanchong Zheng, 2020. "Economically Motivated Adulteration in Farming Supply Chains," Management Science, INFORMS, vol. 66(1), pages 209-226, January.
    5. Xiu, Changbai & Klein, K.K., 2010. "Melamine in milk products in China: Examining the factors that led to deliberate use of the contaminant," Food Policy, Elsevier, vol. 35(5), pages 463-470, October.
    6. Jia, Xiangping & Huang, Jikun & Luan, Hao & Rozelle, Scott & Swinnen, Johan, 2012. "China’s Milk Scandal, government policy and production decisions of dairy farmers: The case of Greater Beijing," Food Policy, Elsevier, vol. 37(4), pages 390-400.
    7. Waldron, Scott & Brown, Colin & Longworth, John, 2010. "A critique of high-value supply chains as a means of modernising agriculture in China: The case of the beef industry," Food Policy, Elsevier, vol. 35(5), pages 479-487, October.
    8. Hailong Yu & H. Holly Wang & Binglong Li, 2018. "Production system innovation to ensure raw milk safety in small holder economies: the case of dairy complex in China," Agricultural Economics, International Association of Agricultural Economists, vol. 49(6), pages 787-797, November.
    9. Liying Mu & Milind Dawande & Xianjun Geng & Vijay Mookerjee, 2016. "Milking the Quality Test: Improving the Milk Supply Chain Under Competing Collection Intermediaries," Management Science, INFORMS, vol. 62(5), pages 1259-1277, May.
    10. Scott Waldron & Colin Brown & Adam M. Komarek, 2014. "The Chinese Cashmere Industry: A Global Value Chain Analysis," Development Policy Review, Overseas Development Institute, vol. 32(5), pages 589-610, September.

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