Milking Profits from Fakes

Tainted milk from China has sickened more than 53,000 children while killing 12. While a food safety issue for sure, the recent tainted milk scare is likewise a counterfeit issue. These evil counterfeiters dilute the milk and add industrial chemical melamine to cover their tracks. Milk tainted with melamine masks dilution by tricking protein detectors into detecting the right amount of protein in the milk. Unfortunately, ingestion of melamine causes kidney failure in babies. Parents think they are buying "real milk" for their children, but are instead buying counterfeit milk.

As with many other industries, milk is a good where counterfeiters flourish due to the large payoff and small risks of detection and punishment. Bee Wilson explains in this New York Times Op-Ed piece that the milk tampering problem today in China is in some ways an echo of 19th century New York City. Lack of refrigeration and high demand in densely urban New York gave rise to temptations to dilute milk and cover up the tampering with flour - or worse. The deaths from bad milk sparked a movement that ultimately led to government reform and the establishment of oversight agencies. The American food supply chain, while not perfect, is a heck of a lot better today because of the reforms.

Many of the same conditions occur in China today. Chinese regulatory agencies are still nascent, and are often easily bought off. Children are dying. Popular rage is simmering. But perhaps like 19th century New York, the recent scandals could spark reforms necessary to safeguard the food supply chain from counterfeiters.

Excellent and fascinating piece. Read the whole thing.