Danish-Swedish dairy cooperative Arla said on Tuesday its Chinese joint venture Mengniu Arla's baby formula had been implicated in a growing Chinese infant milk scandal.
Chinese officials last week ordered a nationwide probe into all baby milk powders after it was reported that dozens of children had developed kidney stones after drinking tainted formula.
Chinese state media said on Tuesday that 20 percent of the country's dairy firms probed in the wake of the health scare have been found to have produced melamine-tainted formula.
Arla Chief Executive Peder Tuborgh told Danish media that three out of 28 tests taken from the firm's Chinese partner Mengniu showed traces of melamine, a banned toxin.
The joint venture, Mengniu Arla, produces Mengniu's milk powder.
