Chinese state media is reporting that authorities have recalled cooking oil products made by three companies after finding they contained the same type of cancer-causing toxin recently found in milk.
A product safety watchdog in the southern province of Guangdong suspended operations at plants owned by the firms, which made oil containing excessive levels of aflatoxin, caused by mould, the Xinhua news agency said.
The incident comes after leading dairy firm Mengniu revealed at the weekend that authorities found high levels of aflatoxin in a batch of milk before it was sold, caused by cows eating mouldy feed at a farm in southwest China.
Aflatoxins, which affect grains and other agricultural products, can increase the risk of cancer, including liver cancer, according to the World Health Organisation.
The oil was made from peanuts, Xinhua said, naming the producers as Fusheng Oil, Manyi Peanut Oil and Mabao Oil.
It was not known if any of the tainted oil had reached consumers, it added.
Chinese state media and netizens, meanwhile, have blasted Mengniu as consumers voice anger over yet another food safety scandal to hit the country, despite repeated crackdowns on product safety violations.
In an editorial Thursday, the state-run China Daily newspaper called on Mengniu to improve quality, saying the reputation of the entire dairy industry was at stake.
"Consumers' tolerance of food safety issues is wearing ever more thin and Mengniu's reputation is unlikely to survive another scandal," it said.
Milk was at the centre of one of China's biggest food safety scandals in 2008 when the industrial chemical melamine was found to have been illegally added to dairy products to give the appearance of higher protein content.
At least six babies died and another 300,000 became ill after drinking milk tainted with the chemical.
Mengniu and several other companies were implicated, and the government at the time vowed to better regulate the dairy industry.