(Writes through) By Chris Buckley and Ian Ransom BEIJING, Sept 18 (Reuters) - China has vowed to overhaul its "chaotic" dairy industry in the wake of a toxic milk scandal that has killed three infants and made thousands more ill, as worried parents flocked to hospitals to have their children examined. The health scare erupted after Sanlu Group last week revealed its milk powder contained melamine, a compound banned in food, and a subsequent probe found a fifth of 109 Chinese dairy producers made adulterated products with the substance. At the latest count, 6,244 children have become ill with kidney stones after drinking powdered milk laced with melamine, with three deaths and 158 suffering "acute kidney failure". The scandal has triggered sackings and detentions, and rocked public trust already battered by a litany of food safety scares involving tainted eggs, pork and seafood in recent years. (For a factbox on recent scandals, see CHINA-PRODUCT/SAFETY (FACTBOX) or click on [ID:nT96138]) "It's just a terrible situation, it's really scary," said a 34-year-old father surnamed Zhou, cradling one of his eight-month twins outside a prominent Beijing children's hospital. "You expect small brands to have quality issues, but these are big brands, name brands. The authorities need to improve their oversight," said Zhou, whose twins had drunk a popular formula made by Synutra International Inc <SYUT.O>, one of 22 producers found to have made melamine-tainted product. Zhou was one of dozens of people queueing under a hot sun outside the Capital Institute of Paediatrics near Beijing's central business district, where staff at times struggled to keep emotional parents and relatives calm. "There are a lot more people than usual because of this milk powder issue. It has been very tiring. Especially for doctors," said a white-coated orderly as she pointed parents toting urine samples to the back of a queue snaking 40 metres (yards) outside a rear entrance. Parents swapped notes as to the formula their children had been drinking and compared levels of melamine found in spiked samples. "Mine was Yashili, so it's not too bad," said a Beijing mother surnamed Liu sheltering from the sun with her four-month daughter. "So long as you didn't drink Sanlu, there shouldn't be a problem," chimed in a woman beside her. Local media have kept quiet about claims that Sanlu and officials in Shijiazhuang, where the company is based, concealed the poisonings from the public and senior authorities during the Beijing Olympics in August. Sanlu is 43 percent owned by New Zealand dairy giant Fonterra, and New Zealand Prime Minister Helen Clark said on Monday that Chinese officials acted last week only after her government pressed Beijing. A vice governor of Hebei, Yang Chongyong, said on Wednesday that Sanlu knew "long ago" that melamine was being used in its milk from as early as 2005, and that 41 of 372 milk stations supplying the company had been found to have problems. The scandal comes on top of a series of scares including lead-tainted toys, toxic pet food, toothpaste and dumplings, and has again spread overseas with two dairy producers recalling exports to Yemen, Bangladesh, Myanmar, Gabon and Burundi. Melamine is rich in nitrogen, used to measure protein, and so can be used to disguise diluted milk. It can cause kidney stones and other organ problems. China's State Council vowed to shake up the dairy industry, saying it faced widespread regulatory failings despite efforts to improve food safety, official newspapers reported. "The Sanlu infant milk powder incident reflects chaos in the dairy products market and loopholes in supervision and administration which has not been vigorous," said the summary of a meeting on Wednesday presided over by Premier Wen Jiabao. "Resolutely punish law-breaking criminals and conscientiously pursue the culpable businesses, supervisory agencies and administrative heads," declared the State Council. The mayor of Shijiazhuang, the home city of Sanlu in north China's Hebei province, was sacked following the earlier dismissal of four subordinates. Hebei police seized 222 kg of melamine and arrested 12 people on Thursday, Xinhua news agency said, bringing the total arrested in the scandal to 18. Six were melamine dealers and the others 12 dealers suspected of selling contaminated milk. Another 10 have been detained including Sanlu's sacked chairwoman, Tian Wenhua, and authorities were hunting for another milk dealer at large. Those steps, however, may not be enough to quell anxiety. "I am very worried," said a woman surnamed Huang at the paediatrics hospital, holding her year-old son, who had drunk Sanlu for months as a new-born. "All I can do is hope that these tests say there is no problem." (Editing by Nick Macfie and David Fox)
A two-month-old baby receives medical checks for possible kidney stones at a hospital in Changzhi, Shanxi province, September 18, 2008. China's mounting toxic milk scandal, in which three infants have died ...
