Chinese police have arrested 19 people in Shanghai for selling around 300 tonnes of expired milk powder, Shanghai Daily reports.

The suspects were allegedly managing a company, which was packaging expired products of New Zealand dairy company Fonterra - one of the most popular brands in China - into smaller packages for resale below market prices, according to media reports.

After a month's-long investigation, the police discovered that one of the suspects sold the expired products to another company, who in turn allegedly resold almost 200 tonnes to distributors in Shanghai and in the Jiangsu, Henan and Qinghai provinces, who sold them on e-commerce platforms or in wholesale.

The authorities have seized 100 tonnes of these products and have shut down the websites selling them.

It's the latest scandal to hit China's beleaguered food industry, where food safety incidents, including sale of adulterated or expired products have been on the rise.

The dairy sector has been among the worst affected by such incidents.

In 2008, six babies died and 300,000 were affected by melamine-contaminated baby milk powder produced in China, prompting many Chinese citizens to begin turning to foreign milk products.