[yakak]

OK, restricted market forces. Plenty of large players bid (or consider risking an entry) keeping in mind the costs of complying with regulations. One that cheats has lower costs than the others calculate preventing competition.

The solution is to remove regulation and testing so thousands of bidders compete on providing an all melamine formula at an exceptional price?

[pjscott]

There are options other than "no regulation" and "exactly the level and type of regulation we have now". For example, you could impose expensive liability for selling defective formula (retail or wholesale), and trust that Walmart will choose reputable suppliers and do proper quality control -- because it's cheaper for them than being irresponsible.