According to reports from both the BBC and Chinese national newspapers dozens of babies are currently being treated for malnutrition in two Chinese provinces after babies were given fake infant formula by their unwitting parents. The Xinhua news agency says that investigations are under way in Anhui and Shandong provinces.
Investigations revealed 45 types of substandard powder being sold in retail outlets across Fuyang city, Anhui and that as a result 141 production facilities located across China were being carefully surveyed.
Further to this, authorities in Shandong, where investigations are not as advanced, have shown that some 10 brands of fake milk were on sale.
Reports say that after being put on the fake formulas the affected babies lost weight rapidly. One of the side affects is a bloated face, which often masks the fact that the infants are being malnourished. It has been estimated that as many as 200 babies have died as a result of being fed the formula - the worst case of malnutrution in the country in 20 years.
An analysis of one particular formula found that it contained one sixth of the required amount of protein to sustain the average baby's dietary requirements for development.
The scandal brings to light one of the Chinese food industry's biggest problems - counterfeit goods. Chinese counterfeit goods are a worldwide problem in the software and technology sectors, but on the domestic market the counterfeiting of major brands is also now a growing problem.
Currently China's dairy industry is struggling to keep up with increasing demand for dairy goods - one of the biggest growth areas being baby formulas. This situation has left the door open to counterfeit goods, a problem that leading baby formula producers such as Nestle are now having to face up to.
Nestle has a clear market lead throughout Asia, and in China its baby products are generally regarded as premium brands.
"We are not planning to profit from the misfortunes of others but we will make a big effort to ensure products are of the highest quality," said company spokesman Francois-Xavier Perroud. "In particular we have been fighting very hard to avoid instances of mislabeling which is obviously damaging for our brands. We believe that parents in China tend to trust established brands and Nestle intends to continue to benefit from this trust."
Perroud confirmed that in the past some non-Nestle products had been repackaged using Nestle packaging and labelling and that this was an issue the company would battle against.
"We will continue to make every effort to ensure that consumers receive the promised product," he said. "In the meantime the company plans to continue the research and development necessary to ensure quality control and the traceability of products."