Fonterra Cooperative Group Ltd. has initiated an internal probe after 19 suspects have been nabbed in Shanghai on Monday for selling about 300 tons of expired milk powder.

A representative from Fonterra believed that the case was a one-off.

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"We support the enforcement steps taken by Chinese officials. While we believe this is an isolated criminal incident, we are reviewing the case internally," Phil Johnstone told Reuters.

"Food safety is our top priority and we are committed to providing safe and high quality dairy products," he added.

The people arrested were allegedly managing a company that repacks expired products into smaller packages and resells them lower than the market prices, the News Hub reported.

Authorities found that one of the suspects sold the expired products to another company, which also reportedly resold nearly 200 tons to distributors in Shanghai, Jiangsu, Henan, and Qinghai.

These distributors in turn also sold the repacked expired products on e-commerce platforms or wholesale. The remaining 100 tons have already been seized and the websites have been shut down.

Meanwhile, Maree Wilson, a spokeswoman from Fonterra, made clear on Monday that Fonterra is not directly involved in the case, clarifying that to Fonterra's knowledge, the repacked milk powders do not have its official packaging, the Stuff.nz noted. Wilson also stressed that none of the arrested suspects were not employees, contractors, or have any association with the company, according to NZ Herald.

This is the latest scandal to hit China's food industry, where reselling of adulterated or expired products have been increasing. Last April, at least nine people were also arrested for producing and selling counterfeited powder milk under the popular imported brands Similac and Beingmate.

Tagsnew zealand, Fonterra, milk powder, expired milk, fake milk, counterfeited products, food safety