Police in Shanghai have arrested 19 people suspected of repackaging more than 200 tons of expired New Zealand-made Fonterra milk powder to sell on the market.

Shanghai's food safety regulatory and police announced on Sunday that the suspects, operating under Shanghai-registered trading firm Jiang Di International Trade Co., Ltd, repackaged 276 tons of expired milk powder into smaller portions and sold them online or through retailers in several provinces for enticing lower prices.

Police were alerted in March after they discovered the repackaged products in a raid on a Shanghai retailer's warehouse. Subsequent raids confiscated 109.2 tons of the expired milk powder from Jiang Di's warehouse. The other 166.8 tons had been sold to retailers.

Authorities said they were pursuing the dairy products in question that had entered the market and ordered the closure of the retailers' online shops.

There is not yet any health case reported from people who ate the expired milk powder.

Initial investigation shows the group's motive was to salvage loss from the unsold imported food that went beyond the expiration date.

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