Beijing, Feb 11 - China's national quality watchdog said on Wednesday it was investigating the safety of dairy products made by two companies. Both firms insisted there were no problems and that their goods were safe.
China has launched a crackdown on tainted food following the deaths of at least six babies last year from drinking infant formula contaminated with melamine, a toxic industrial compound that can give a false positive on protein tests.
Now the government is probing China's top milk producer Mengniu Dairy, and Dumex, a unit of France's Danone .
"At present, the state is involved in a comprehensive clean-up on the use of food additives," the watchdog said in a statement on its website announcing the Mengniu probe.
It said it was investigating Mengniu's use of an additive called osteoblast milk protein, or OMP, in one of the firm's premium milk brands to make sure it was safe.
Mengniu, based in the northern Chinese region of Inner Mongolia, said it had done nothing wrong.
"A report by Inner Mongolian quality inspectors after a field trip clearly states the quality and safety of OMP," Mengniu said in a statement carried on the website of state news agency Xinhua.
The raw ingredients for the OMP had been imported from New Zealand's TATUA Co-operative Dairy Company Ltd and had passed customs' inspections, Mengniu added.
Hong Kong-listed shares of Mengniu slid 22 percent on Wednesday before closing down 12.48 percent.
The watchdog did not say whether it had ordered Mengniu to stop adding OMP and a spokesman declined to comment on the issue.
Mengniu was among several firms in China found to have produced melamine-contaminated milk.
The company warned of a possible loss of $131 million in 2008 as the tainted dairy product scandal in China dented sales.
The watchdog also said in a statement faxed to Reuters from its Shanghai branch that it was looking at the quality and safety of milk powder made by Dumex.
Alejandro Rivas, managing director of Dumex in China, told Reuters by telephone they had thoroughly tested their milk powder since the melamine crisis and found no problems.
"We take this very seriously," Rivas said. "We have yet to receive any formal complaint from any consumer saying they have a problem with our products."
The melamine incident was the latest in a string of food safety failures that have blighted the "made in China" brand.