Wellington - China's contaminated milk scandal has cost the world's largest dairy exporter, Fonterra Cooperative Group, 139 million New Zealand dollars (95 million US dollars), the company said Wednesday.

Chairman Henry van der Heyden revealed the loss at a press conference in New Zealand's largest city Auckland, saying he was shocked by media reports from China that Fonterra's partner, Sanlu Group, might have received complaints of sick children as early as December.

"I would be absolutely disgusted and appalled if information was held back," van der Heyden said. "What has happened here is a criminal event."

Fonterra chief executive Andrew Ferrier said he had no indication that Sanlu had lied but the company would learn from what he called "very painful lessons."

The scale of the tragedy had been "truly shocking," he said.

The tainted milk scandal in China broke nearly two weeks ago with the discovery that the chemical melamine had been added to milk used to make Sanlu baby formula to boost its protein levels. Since then, melamine has been discovered in other dairy products produced by other Chinese companies.

The chemical has killed four babies and sickened at least 53,000 and prompted countries around the world to ban Chinese dairy products.

Despite the scandal, Ferrier said China would remain a priority in Fonterra's growth strategy. The Sanlu brand could not be saved, but the company could be salvaged, Fonterra said.

"Sanlu has been damaged very badly by this tragedy," van der Heyden said. "It's hard to say at these early days how it can be re-constructed."

He rejected allegations that Fonterra had failed to properly manage risk. (dpa)