An investigation into Sanlu Group Co, the company responsible for the milk powder and the largest milk powder producer in China, found that the milk powder had been "tainted" with Melamine, a nitrogen-rich chemical. The chemical, normally found in plastics and fertilizers, is not meant to be consumed but is sometimes mixed in with food by companies that want their products to appear more protein-rich since food tests for protein involve nitrogen tests. Melamine-contaminated ingredients that were sourced in China for use in pet food were the cause of kidney failures and kidney stones (the same symptom that has occurred in the children who drank the Sanlu Bei Bei Infant Powder) of thousands of pets in the United States last year.

Sanlu Group is partly owned by the New Zealand dairy export company, Fonterra Co-operative Group, Ltd. The company says that it "understand[s] the the product involved is only sold in China." Although the United States has a ban on infant formula from China, U.S. officials fear that the formula could have been brought in illegally and sold in ethnic food markets, and the officials warn against anyone consuming infant formula that is manufactured in China. Chinese officials also say that the problem formula was mostly sold in poor and remote regions of China at a lower cost.

China, for one, doesn't want to to waste any time getting to the bottom of the contaminated formula and the government promises "serious punishment" for the people responsible. China has also reported the case to the World Health Organization in hopes that some transparency of the issue will help international consumers become more comfortable with the quality control in China.

China Recalls Tainted Infant Formula [CBS News]
China Blame Milk Suppliers In Baby Health Scare [Reuters]