New Zealand dairy giant Fonterra said on Sunday it had known since August that the Chinese firm it part-owns was selling contaminated milk now linked to the sickness of more than 400 babies and at least one death.
Sanlu Group, a milk powder producer 43 percent owned by Fonterra, was ordered to halt production last week after a preliminary investigation found that melamine, a chemical compound, in its powder was causing kidney stones in infants.
Chinese state-run media first reported on Sept. 10 that babies had fallen ill after drinking the formula, and Sanlu on Sept 11 issued a recall of its product made before Aug. 6.
"From the day that we were advised of the product contamination issue in August, Fonterra called for a full public recall of all affected product," the company said in a statement.
"Consumer safety has always been our number one priority."
Fonterra said the company was seeking a meeting with the Chinese regime to discuss the issue.
Sanlu had begun receiving customer complaints in March that babies' urine was discoloured and that some had been admitted to hospital, the China Daily said on Saturday.
China's investigation of the tainted milk powder has widened to its dairy-producing regions, as officials attempted to track down the source of melamine in the milk.
Farmers or dealers suppling milk to Sanlu may have diluted it with water and then added melamine, a substance used in plastics, fertilisers and cleaning products, to make the milk's protein level appear higher than it actually was.
Melamine was linked to deaths and illness of thousands of cats and dogs in the United States last year after it was added to pet food components exported from China. Normally inert, in the presence of cyanuric acid it can trigger the formation of kidney stones.
In Taiwan, authorities have sealed all Sanlu milk powder products that have yet to be distributed to retailers, after China's Taiwan Affairs Office said Sanlu had exported 25 tonnes of the milk powder to Taiwan in June.
"We've taken all the Sanlu milk powder off the shelves at stores," said Wang Cheng-huei, a deputy director-general of the Bureau of Standards, Metrology and Inspection at Taiwan's economics ministry.
Many of the sick babies came from poor or remote areas, state media said. Babies in rural China are often raised on formula after their mothers return to work in cities, leaving them in the care of their grandparents. Urban mothers also supplement breast-feeding with formula.
In 2004, at least 13 babies in the eastern province of Anhui died after drinking fake milk powder that investigators found had no nutritional value.