BRIGHT Dairy & Food Co Ltd reported a net loss of 271.24 million yuan (US$39.9 million) in the third quarter as a result of the cost of refunds and product recalls during the nation-wide milk scandal.

The loss in the third quarter ended September contributed to a 130 million yuan-loss for the Shanghai-based dairy maker in the first nine months this year, according to its statement filed to the Shanghai Stock Exchange yesterday.

Bright Dairy said it suffered 344.59 million yuan in losses by the end of September due to the contamination of China's milk supply.

Last month, the dangerous chemical melamine was found in milk manufactured by 22 milk producers, including leading market players Inner Mongolia Yili Industrial Corp and China Mengniu Dairy Co Ltd.

The tainted milk, which caused four baby deaths and more than 50,000 children to fall ill, triggered a wide range of product recalls and compensation payments to victims across the nation.

"The melamine incident has put the whole dairy industry into a difficult situation and has caused a rather big impact on the company," Bright Dairy said. Bright Dairy said it was also expecting a loss for the whole year as the impact of the melamine contamination would continue to affect its sales.