The Chinese Cabinet has ordered a complete reform of the dairy industry and harsh punishment of those responsible for tainting milk formulas for babies. The state news agency has reported that the State Council, presided over by Premier Wen Jiabao, on Wednesday found that the dairy industry lacks necessary supervision and safety checks and thus is in need for heavy restructuring.

The State Council issued six orders which take effect immediately at all government levels:

1. the best and free medical care is to be administered to those sickened by melamine-tainted milk powder
2. all sub-standard products will be confiscated and destroyed
3. the production of dairy companies will be supervised using  on-site inspectors
4. regulations concerning safety and supervision of the dairy industry will be revised
5. dairy farmers will be subsidized and companies with higher-quality products will be encouraged
6. the precise cause of the current health crisis concerning tainted milk will be found and those responsible will be severely punished

The General Administration of Quality Supervision, Inspection and Quarantine examined the infant milk powder products of 109 firms and found melamine in products made by 22 firms.

Dozens have been arrested in the scandal and will be severely punished by the Chinese government after the investigation. As China ranks first in capital punishments (U.S. ranks fifth), it is also possible that the government executes some of those responsible. It appears that the company received complaints as early as March, but failed to notify authorities.

Chinese regulators found that the Sanlu-brand milk formula, made by Sanlu Group, was tainted with the chemical melamine, which killed three babies and caused health problems in more than six thousand. The same substance was found in pet food ingredients from China and linked to the deaths and illnesses of hundreds of cats and dogs in 2007. Melamine can make food appear to have higher levels of protein in testing but can also cause kidney failure. It is normally used in manufacturing plastic materials.

The Sanlu Group has stated that the milk sent in by suppliers was tainted, most probably, at the milk-collecting stations. Two brothers surnamed Geng in Zhengding County, Hebei, have acknowledged that they added melamine to milk sent to Sanlu. In addition, it has dispatched teams to independently investigate the incident. The company recalled all milk powder made before August 6 and issued a public apology.