BEIJING, China (CNN) -- Two brothers who sold fresh milk used to produce contaminated baby milk powder were arrested by Chinese investigators Monday and could face death if convicted, according to China Daily, the state-run newspaper.
Two infants have died and more than 1,200 have been sickened by tainted formula that apparently had little nutritional value -- the raw milk had been watered down and a chemical added to fool quality checks, the newspaper said.
The scandal prompted China agricultural officials to start a nationwide inspection of its dairy industry, the paper said.
While 19 people were detained for questioning, the only ones arrested so far are two brothers who supplied about three tons of milk each day to the Sanlu Group, which manufactured the baby formula, the paper said.
Investigators said the brothers -- surnamed Geng and residents of the city of Shijiazhuang -- confessed to watering down the raw milk and mixing in tripolycyanamide, also known as melamine. They said they did it to recover losses suffered when the factory rejected earlier milk shipments, the paper reported. Watch a report on the arrests of milk suppliers »
The paper quotes the reaction of one brother, age 48, when asked if thought about the consequences of adding melamine.
"I've never asked and never thought about it," he said. "I only know it's bad for health."
China Daily quoted the Communist Party's provincial secretary promising the men would get "severe punishment" because "we owe the people an explanation."
The brothers are charged with producing and selling toxic and hazardous food, which carries a possible death penalty, the paper said.
China's Health Ministry said Monday that 1,253 babies were sickened by the tainted formula, including 340 who are hospitalized and 53 are considered to be in serious condition. The illnesses include malnutrition and kidney stones.
Health experts say ingesting melamine can lead to kidney stones, urinary tract ulcers, and eye and skin irritation.
The chemical is commonly used in coatings and laminates, wood adhesives, fabric coatings, ceiling tiles and flame retardants.
Chinese officials said none of the tainted formula was exported, except for "a fraction of the milk powder sold to Taiwan for food processing."
Government inspectors were expected to release results of baby formula testing around China on Tuesday, the Xinhua news agency reported.
Sanlu Group has recalled more than 8,200 tons of the tainted formula following reports of babies developing kidney stones, Xinhua said. Watch what Sanlu has done »
Sanlu, one of China's leading dairy producers, has also sealed off more than 2,100 tons of contaminated product, and another 700 tons still need to be recalled, the news agency said.
It is not the first time Sanlu has been connected to a scandal involving tainted milk powder, according to China Daily.
In 2004, at least 13 infants in the eastern Anhui province died of malnutrition after drinking milk powder that had little to no nutrition. The illegally manufactured milk was falsely labeled with the Sanlu brand, according to the paper.
This episode marks the latest in a string of tainted products produced in China.
The U.S. Food and Drug Administration recalled more than 150 brands of cat and dog food last year after finding that some pets became ill or died after eating food tainted with melamine, the same chemical found in the powdered milk.
Two Chinese businesses, a U.S. company and top executives of each were indicted by a federal grand jury in February in connection with tainted pet food, which resulted in deaths and serious illnesses in up to thousands of U.S. pets, federal prosecutors said.
In October 2007, regulators and retailers in the United States recalled at least 69,000 Chinese-made toys over concerns of excessive amounts of lead paint, which can cause hazardous lead poisoning.
In November, shipments of the popular toy Aqua Dots were found to have been contaminated with a toxic chemical that turned into a powerful "date rape" drug if swallowed, causing some children who ate the craft toys to vomit and lose consciousness.
And in February, a Maryland candy distributor pulled Pokemon-brand Valentine lollipops from store shelves after bits of metal were found in the sealed treats, authorities said.
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