Sept. 17 (Bloomberg) -- China found the industrial chemical melamine in infant formula made by 22 companies in a widening scandal that's revived concerns about the nation's food and product safety.

The General Administration of Quality Supervision, Inspection and Quarantine ordered the ``immediate'' destruction of 69 tainted products made by 22 of the 109 Chinese companies that make infant milk, it said in a statement on its Web site.

Milk contaminated by melamine, which can make the protein level in dairy products appear higher than it is, has been linked to 1,253 cases of infant kidney stones in China, killing two. China's biggest dairy producers, including China Mengniu Diary Co., Inner Mongolia Yili Industrial Group and Sanlu Group Co. were among companies linked to tainted milk, the regulator said.

China's ``supply-chain checks have to be strengthened,'' Joerg Wuttke, president of the European Chamber of Commerce in China, said in a phone interview. ``It appears that a couple of sub-suppliers are still cutting corners.''

Chris Kwok, board secretary at Mengniu, was in a meeting and unavailable to take calls. Mengniu's shares were suspended in Hong Kong today.

Officials at Sanlu and Yili were also unavailable for comment.

Sanlu, 43 percent owned by New Zealand's Fonterra Cooperative Group Ltd., apologized to consumers and promised to recall all milk powder produced before Aug. 6, Xinhua News reported Sept. 15.

Protein Level

Melamine can make the protein level in dairy products appear higher than it is. 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.

The China diary market is worth $19 billion last year, Merrill Lynch & Co. said, citing Euromonitor data. Per capita consumption of liquid milk in China was over 20 kilograms in 2007, the brokerage said.

Wellcome, a supermarket chain owned by Dairy Farm International Holdings Ltd., late yesterday said it will stop selling ice cream made by Yili after the chemical was found in a sample.

ParknShop, a supermarket chain owned by Hong Kong billionaire Li Ka-shing, has pulled ice cream made by Yili after melamine was found in a sample, spokeswoman Pinky Chan said in a phone interview today.

`Natural Choice' Yoghurt

Hong Kong's Food and Environmental Hygiene Department found melamine in Yili's ``Natural Choice Yogurt Ice-bar with Real Fruit,'' Wellcome said in its statement. The supermarket operator said it will stop selling all Yili brand ice cream as a precaution.

Separately, Fonterra recalled one batch of prenatal milk sold in China under the Anmum Materna brand name, according to a statement sent by e-mail late yesterday. The batch was manufactured under license by Sanlu using local raw milk that may have been contaminated and sold only in China, according to the statement.

China announced an investigation into Sanlu's infant formula last week after reports of a rash of cases of kidney stones in infants in at least seven provinces. The company has since admitted that it knew of the contamination in early August, more than a month before the public recall issued last week.

To contact the reporters on this story: Helen Yuan in Shanghai at hyuan@bloomberg.net; Lee Spears in Beijing at lspears2@bloomberg.net.

Last Updated: September 16, 2008 22:09 EDT