IT MAY be several weeks before the enormity of the milk-poisoning tragedy in China is fully understood.

However, we've glimpsed enough of the detail to see that the practices of milk suppliers and dairy companies are an inherent part of a system of product cheating that puts people's lives at risk.

The dairy company that was initially fingered as the culprit - Sanlu, which is 43 per cent owned by New Zealand dairy farmers through Fonterra - was originally aware in March this year that there were complaints about babies getting ill after consuming its infant formula products.

Sanlu's board admitted melamine was in its products a week before the Beijing Olympic Games but claims it was working with local authorities to manage a product recall.

It wasn't until a frustrated Fonterra spoke of the issue to the NZ Government - whose Prime Minister then told her Chinese counterpart - that the problem got the right level of attention in China.

All the while, unsuspecting parents were feeding their children poisonous products.

That was clearly the tip of the iceberg. A fifth of China's 109 registered dairy companies have now been implicated, and the list of suspected products has spread beyond baby infant formula milk powder to mainstream consumer products such as yoghurt, ice cream and liquid milk.

This melamine-injection racket is reportedly well entrenched as a practice used to dud the tests of protein levels in a range of products made from watered-down milk.

The tragedy has partially lifted the lid on a culture of corner-cutting, copying and cheating that is well understood by many who've done business in China.

This is not the first scandal involving the deaths of children at the hands of criminals cutting corners to weasel a few more yuan out of the dairy market.

Chinese mothers will surely find it hard to trust local infant formula brands and a wider range of tainted dairy and milk products, so there may be a retreat towards the safety of fully-imported products.

The wider risk is the trust for the whole dairy category is jeopardised at a time when the prospects for dairy were being strongly influenced by future demand from China.

The safety crisis ravaging China's dairy sector shows the country faces a very long haul before a reform drive can bring order to a chaotic and deadly food industry which threatens its own consumers and those of its trading partners.

The culture of corner-cutting and cost minimisation for the sake of profit will plague this and other sectors of the food industry until China's consumers wage their own effective revolution.