Five batches of Nanshan Bywise infant formula milk powder, a brand under Hunan AVA Dairy Co, are reportedly tainted with highly toxic aflatoxins, which analysts said Sunday would hurt the producer's sales and push consumers further away from domestic brands.

"The scandal will surely dampen the short-term sales of Nanshan," Chen Lianfang, a dairy industry analyst at Beijing Orient Agribusiness Consultant, told the Global Times. "But its impact on the sector won't be as big as that of Mengniu scandal as Nanshan has a limited market presence."

Guangzhou Industrial and Commercial Administration Bureau announced Friday night that some milk product brands like Nanshan Bywise and Bright Dairy failed in recent sample tests. Nanshan Bywise, the authority said, failed tests for aflatoxin in all the five batches of its infant formula milk powder, Guangzhou-based Information Times reported Sunday.

But Nanshan Bywise said Sunday it has not received the test results from the Guangzhou authority yet. "We are still verifying the news," a staff with Nanshan Bywise who didn't give her name told the Global Times. "Until we have verified the news, there won't be a public statement related to it."

Aflatoxin is a substance that can cause severe liver damage or cancer.

"It is technically easy to test. Milk producers have the duty to test for the substance twice in the production process, once in raw materials and again in finished products," Wang Dingmian, former vice chairman of the Guangdong Provincial Dairy Association, told the Global Times.

The cancer-inducing substance tends to be formed when fodder for milk cows like corn and peanuts are stored for long time in a poorly-ventilated place, Wang noted.

"Short-term sales of domestic dairy brands, especially that of Nanshan, will suffer," Chen said. "It may benefit foreign brands, which already dominate the high-end infant formula milk powder."

Domestic dairy companies lost the trust of the public after the 2008 melamine scandal. In recent years, "some domestic brands began establishing their own milk farms, trying to ensure the safety of milk source but problems like insufficient attention to supply chain and ineffective management still remain," Wang Dingmian said.

However, China presents huge potential for milk powder consumption, with 16 to 20 million new births annually, according to data provider ocn.com.cn.

Leading dairy producer Mengniu was exposed to having excessive aflatoxin in its milk products in December 2011. The news pulled Mengniu's shares down 26 percent to the lowest level in two years and  is believed to have dragged down the shares of other industry players like Yili and Bright Dairy.

Mead Johnson cleared of vanillin claim

The National Food Quality Supervision and Inspection Center said no vanillin was found in a Mead Johnson infant formula powder, the Xinhua News Agency reported Sunday.

The brand was accused of containing Vanillin by Hunan Agricultural University on July 10. Wyeth, another accused brand, was also cleared of the claim, Xinhua said. 

Vanillin, which easily creates a strong milk fragrance, tends to develop taste dependence and imbalanced diet if consumed for long.

A number of foreign dairy brands were reported to have quality problems, such as containing insects in their packaged milk powder. The General Administration of Quality Supervision, Inspection and Quarantine announced Saturday that 10 tons of infant milk powder imported from Germany and New Zealand were destroyed for mislabeling.