The discovery has again raised concerns about food safety in the country, CNN reported Tuesday.
China Daily reported a recent test by authorities found a batch of milk produced by the Mengniu Group was found to have excessive levels of aflatoxin, a cancer-causing substance. The report quoted the company as saying the entire tainted batch was destroyed in its branch plant in Sichuan province and that none of it reached the market.
The random test covered about 200 dairy products in 21 provinces. Two products, including one made by Mengniu, were found to contain excessive aflatoxin, the report said.
Despite the company's assurance, customers remained confused about the safety of the product, China Daily reported.
CNN quoted other Chinese media as saying the toxin may have come from contaminated feed consumed by cows that produced the milk.
Citizens strongly attacked the management of Chinese companies on social media sites, CNN said.
"Businesses in China are destroyed by Chinese businessmen themselves," said one user. "Don't ever blame us (for) buying foreign goods."
Another user said: "Let us boycott Mengniu altogether, show the shameless businessmen our strength."
In a similar scandal in the country in 2008, melamine-tainted milk was blamed for the deaths of six babies and for kidney stones and urinary tract problems in hundreds of thousands of other children. Two people found to be involved in the scandal were executed.