Cabio Biotech: Chinese firm under fire in infant formula recall

Here's what you need to know:

- Why is it under fire? -

In recent weeks, major firms including France's Danone and Switzerland's Nestle have recalled batches of infant formula that could be contaminated with cereulide, a toxin that can cause diarrhoea and vomiting.

Companies have largely stopped short of naming the source of cereulide contamination.

But French company Nutribio told AFP its recall "follows an alert from Cabio Biotech, an international supplier of the Omega-6 (ARA) ingredient".

ARA, or Arachidonic acid, is a fatty acid used primarily in baby formula and food products.

The French agriculture ministry has also referred to a Chinese supplier at the origin of infant formula recalls by Nestle, along with those by Lactalis and Vitagermine.

On Monday, a French children's advocacy group named the company in a court filing.

In an emergency injunction filed with a Paris court, the Chartres-based Association for Children's Health asked the government to order companies to pull all formula with ARA oil produced by Cabio Biotech within 24 hours.

- What do we know about the company? -

Headquartered in the central Chinese city of Wuhan, Cabio Biotech was established in 2004 and is the largest domestic supplier of ARA products.

ARA contributes to brain and nervous system development during infancy.

As well as ARA, Cabio Biotech's other main products are docosahexaenoic acid (DHA), sialic acid and Vitamin A precursor beta-carotene.

Cabio Biotech claims more than 50 percent of the domestic market, with major Chinese dairy companies such as Mengniu, Junlebao and Yili among its clients.

Company filings show it is also a supplier for Nestle and Danone.

In a statement this month, Nestle said it was conducting ARA oil tests "following the detection of a quality issue in an ingredient provided by a leading supplier".

- What has the reaction been? -

In France, especially, disquiet has grown, with investigators looking into the cause of death of two infants who allegedly consumed Nestle milk.

At this time, there is no established causal link between the formula and their deaths, according to French authorities.

Beijing said this month it attached "great importance" to Nestle's formula recall in Europe and urged the company's domestic arm to promptly recall relevant batches in China.

The State Administration for Market Regulation vowed to "fully ensure the quality and safety of infant formula", a statement said.

Chinese authorities are highly sensitive to food safety issues, and one of the biggest scandals in recent decades involved contaminated baby formula.

In 2008, tainted powdered milk made hundreds of thousands of babies ill and was linked to six deaths in the country.

Roughly 300,000 children were affected, many with renal failure, by milk powder laced with the chemical melamine to give the appearance of higher protein levels.

Melamine is usually used to make plastic.

- What has the company said? -

Cabio Biotech has yet to publicly address allegations its ARA oil was contaminated.

It did not respond to multiple requests for comment by AFP.

The company's share price collapsed in China following the Nestle recalls in early January.

Its stock has fallen by more than 21 percent since January 7, as Nestle's own shares have since dropped by around four percent.

Danone's stock also plunged by 10 percent after the group announced its first recalls.