Two brothers were arrested in a scandal over contaminated baby milk in China, as a second infant died, state-run media said Monday.

Authorities said the number of babies who fell ill with kidney stones after being fed with contaminated baby milk produced by the Chinese dairy San Lu rose to 580. Two infants died.

The brothers from Heibei province, who are among 19 suspects detained in the wake of the scandal, are accused of having delivered 3 tons of toxic milk per day to San Lu from their private milk collecting station, the Xinhua news agency said.

The older brother confessed to having spiked the milk with the banned chemical melamine to increase the milk's protein content. He said he lost money because San Lu repeatedly rejected his milk because of quality problems.

In Gansu province contaminated milk powder was detected at Haoinu, a partner company of San Lu, which produces products under the same name.

San Lu Group, one of China's leading producers of powdered milk, however, had been aware of its product's toxic contents for some time, without recalling the products or making the information public.

The reasons for the delay remain unclear, but speculation abounds that China's authorities may have wanted to cover up the scandal because of the Beijing Olympics. The Beijing authorities only acted after interventions by the New Zealand government last week, as local authorites failed to act.

New Zealand dairy giant Fonterra, which owns a 43-per-cent stake in San Lu, said it urged its Chinese partner at least one month ago to recall the product, a month before a full public recall was ordered.

Chief executive Andrew Ferrier said San Lu had withdrawn the contaminated formula from trade distribution as soon as the board, which has three Fonterra representatives, was advised on August 2, but a full public recall was not ordered until about a week ago, following procedures laid down by the Chinese health ministry.

Calling it a "truly tragic occurrence," Ferrier said there was "still an enormous amount of uncertainty about this," and the Chinese authorities had now ordered a complete recall of all San Lu products.