According to numerous reports from China, the manager and an accomplice – known only as Zhou - purchased thousands of boxes of almost out-of-date Mengniu-brand milk at a reduced price before removing the original production dates and replacing them with new ones.
Mengniu has identified the Zhejiang province regional sales manager only by his surname – Wang.
DairyReporter.com approached Mengniu, which confirmed that Wang had been arrested and that an investigation had begun.
In a statement posted on its Weibo social media page, the dairy company confirmed that Wang had been arrested by police under suspicion of altering the production dates on 3,000 24 x 250ml cases of Mengniu-branded milk.
The arrest is the latest in a long line of scandals to hit China’s dairy industry.
Mengniu, which is ranked among the top 20 dairy companies in the world, revealed that it is co-operating with authorities in Zhejiang province.
“We are fully cooperating with local authorities and security organisations to investigate the case, and the 3,000 cases, which each contained 24 250ml cartons, of Mengniu pure milk products have been recalled for exchange,” said the translated Weibo statement.
The firm reiterated that it will not tolerate this kind of behaviour and promised to hand down severe punishments to any member of staff that broke the law. It also vowed to further strengthen its management and control of product quality throughout the sales channel.
“Incidents that threaten the interests of the consumer and damage the Mengniu brand will not be tolerated and will be dealt with strictly and in accordance with national laws and regulations. For the deficiencies in company management, we express our sincere apologies to consumers,” the Weibo-posted statement added.
The arrest comes as no surprise to the scandal-prone Chinese dairy industry.
In 2008, six children died and around 300,000 were sickened after consuming infant formula contaminated with melamine. A steady succession of safety-related incidents have followed and Mengniu has not been immune.
Shares in the company fell by 24% in December 2011 after Chinese regulatory authorities found excessive levels of a cancer-causing toxin.
The firm has, however, taken significant steps in recent months to improve the safety of its products.
Earlier this year, it entered into an agreement with Danish dairy co-operative Arla, under which the firms agreed to set up a technology centre to provide expertise on milk quality.