BEIJING - THE stock price of China Mengniu Dairy, the company at the centre of China's tainted milk product scandal, plunged on Tuesday as the government pledged to crack down on a milk-gathering system that was 'out of control.'

One of China's biggest milk producers, Mengniu saw its stock price plummet slightly more than 60 per cent in Hong Kong trading on Tuesday after its products were found tainted with the industrial chemical melamine.

Mengniu, China's No. 1 dairy producer in total volume, said only a small portion of its products were contaminated and blamed the contamination on 'the illegal acts of some irresponsible milk collection centers and raw milk dealers.'

'The board wishes to sincerely apologise for the incident and any inconvenience caused to the public,' the company said in a statement to the Hong Kong stock exchange.

Melamine, used to make plastics and fertilizer, has been found in infant formula and other milk products from Mengniu and 21 other Chinese dairy companies.

Suppliers trying to cut costs are believed to have added it to watered-down milk because its high nitrogen content masks the resulting protein deficiency. -- AP