Sept. 17 (Bloomberg) -- Fonterra Cooperative Group, whose Chinese affiliate Sanlu Group Co. was found to have produced melamine-tainted milk, said local and regional officials in China took too long to issue a public warning.

Fonterra, the world's biggest dairy exporter, urged Sanlu and officials since Aug. 2 for a public recall of the tainted products, Chief Executive Officer Andrew Ferrier said today. ``It took too long to get public,'' he said. ``We had been urging that from day one.''

China today widened a probe that began Sept. 11, ordering the recall of infant formula made by 22 companies after tainted milk was linked to the hospitalization of more than 1,300 infants, killing three. The country's biggest dairy makers, including China Mengniu Dairy Co., Inner Mongolia Yili Industrial Group and Sanlu are among those affected by the recall, regulators said.

``I cannot understand why Fonterra withheld the information'' for more than a month, Sue Kedgley, Green Party lawmaker and chair of the health committee of New Zealand's parliament, said in a statement e-mailed to Bloomberg News. ``How many more children became sick and even died because of their refusal to go public?''

Auckland-based Fonterra owns 43 percent of Sanlu, one of China's biggest makers of infant formula.

`Criminal' Contamination

Ferrier said Sanlu was bearing the public brunt of what was clearly a ``criminal'' contamination issue within the wider industry in China. Milk producers elsewhere don't routinely test for melamine and it's hard to see what could have been done to detect the poisoning earlier, he said.

China's central government responded ``immediately'' with emergency-response measures after receiving notification of the tainted products from local officials, Foreign Ministry spokeswoman Jiang Yu said yesterday at a press briefing in Beijing.

Initial investigations showed that 372 milk-powder factories primarily supplying Sanlu had been adding melamine since April 2005, Yang Chongyong, vice governor of Hebei province, said today at a press briefing in Beijing.

At least 158 infants were found to have kidney failure after 6,244 infants were brought to clinics on suspicion of being poisoned by melamine, the Chinese government said today. More than 1,300 children displaying symptoms of poisoning have been hospitalized, the government said.

`Within the System'

Sanlu received complaints about its products in March and employed six outside agencies to test its product, Ferrier said. None of them picked up the melamine contamination that Sanlu only found in August, he said.

``We made the call that we had to work within the Chinese system,'' Ferrier said on a conference call with journalists. Local officials were only prepared to have stores pull items off shelves without making a public announcement, he added.

The date that Ferrier said Fonterra first pushed for a recall was six days before the start of the Olympic Games in Beijing.

Melamine can be used to disguise diluted milk because it can make the protein level appear higher than it is. The chemical allows producers squeezed by inflation and government-imposed price limits to get ``higher-rated protein content at no extra cost,'' according to Steve Dickinson, a partner at law firm Harris Moure Plc who has studied China's food-safety system.

The chemical, used to make plastics and in tanning leather, was found in exported pet food last year and blamed for killing thousands of cats and dogs in the U.S.

Reporting Delays

Officials at the city and provincial level share the blame for delays in reporting the melamine contamination, Yang, the Hebei deputy governor, said today in Beijing. Sanlu is based in Shijiazhuang city in Hebei province.

The government of Shijiazhuang city received news of the contamination from Sanlu on Aug. 2 and didn't formally notify the provincial government until Sept. 9, Yang said. Cities are required to notify provincial governments of food contamination within two hours of finding out, he said.

The provincial government then took a day to notify the central government, delaying the arrival of a national inspection team in Shijiazhuang until Sept. 11, Yang said.

``The Shijiazhuang government has a large responsibility,'' Yang said. ``The provincial government also has responsibility.''

To contact the reporter on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net

Last Updated: September 17, 2008 04:44 EDT