The recent allegations in an alleged smear campaign launched by Mengniu Dairy Co, a major dairy producer, has aroused renewed public anxiety.

According to the police, three suspects, a Mengniu manager and two public relation consultants, spread malicious online rumors against another dairy giant, Yili Industrial Group. The trio has now been arrested.

Mengniu has denied all knowledge of the defamation and attributed the scandal solely to the manager's personal judgment. Many in the public think it was Mengniu that had initiated another smear campaign months ago in which dairy producer Synutra International Inc was accused of selling infant milk powder containing excessive hormones.

Some might make the hasty conclusion that Mengniu is a unique reprobate that sullies its rivals' reputations and makes vicious money from it. It is more likely that cutthroat competition and unlimited moral deprivation has become the essence of commercial survival in this industry.

Many industries previously under the State's jurisdiction have prospered with the entrance of private rivalries and relentless competition.

Nevertheless, past experience seems to have partly refuted the theory that competition leads to efficiency and a better quality of products.

During fast economic growth, a firms' integrity and social responsibility is often compromised, since the marginal gains from trading a "tiny" piece of honesty often count a lot. Meanwhile, the public relations departments always try to impress the public with their superficial adherence to integrity. Conceivably, undermining an adversary's public image becomes a viable stratagem.

Using an online smear campaign not only exposes deep commercial flaws, but also leverages the judgment of consumers. The widespread mistrust of dairy products, following the Sanlu milk powder scandal in 2008, makes such smear campaigns more likely to succeed.

When Synutru was blamed for the reported premature development of infants, the firm's denials meant almost nothing in the face of online censure. Even after the Ministry of Health exculpated the firm, the company's reputation was damaged.

The degradation of public image accounts for the dairy industry's own woes. It seems that some firms want to take advantage of the situation by sinking the reputation of others.

The people in the dairy industry need to understand that commercial integrity means something. It indicates a sense of professionalism and adhesion based on the entire industry's principles.

It is harmful to make more money by victimizing other rivals because the entire industry suffers. There might be temporary financial benefits, but in the long run the industry's credibility is lost forever.

It is understandable that foreign dairy companies are better off after China's dairy industry succumbed to internecine struggles.