Fears about formaldehyde in Chinese beer have offered a vivid lesson about public health scares in China and how newspapers, Web sites and marketers can drive the agenda more than state authorities.

This month, Beijing's respected Global Times newspaper published an article claiming that about 95 percent of China's domestically produced beer contains the chemical formaldehyde, much of it exceeding the nation's standards by a factor of six.

The paper printed its expose alongside a letter from an anonymous reader who "wanted the public to know" that the use of formaldehyde as a stabilizer had become "an unwritten rule" among many Chinese breweries. "There is only one reason," the letter said. "Formaldehyde is the cheapest!"

The claim raced across Chinese Web sites, prompting accusations of a coverup from outraged consumers. "My right to know has been deprived," because most breweries aren't disclosing their practices, said one posting on Sina.com, a popular Internet portal. "Today I declare: I will no longer drink beer." Soon came the announcement of an emergency beer test by the government and emphatic denials by the biggest brewers.

It turns out some beermakers in China do use formaldehyde, a practice that has been abandoned in the West. While the Chinese government insists the levels are safe and within international standards, consumer activism may have triggered a change in some smaller brewers' practices.

The fracas illustrates the tumultuous state of China's consumer goods market. Until the end of the Cultural Revolution, most Chinese were bereft of all but the most basic and crudely crafted products. The shift to a free market beginning 20 years ago brought a flood of new goods. But it also ushered in a Wild West atmosphere in which greedy companies and weak regulations have left shoppers awash in counterfeit, defective and sometimes fatally unsafe products.

Chinese consumers are fed up, and muckraking newspapers and Internet users are giving them a voice. In April last year, for instance, the press helped expose counterfeit powdered milk, which lacked nutrients and was causing babies in poverty-stricken Anhui province to develop swollen heads, leading to 13 deaths.

The newly empowered consumer voice can be loud -- but also sometimes misdirected. "It's a mixed bag," said Roy Wadia, the China media-relations officer for the World Health Organization. "Whatever the source of that information is, whoever is first and fastest normally wins the race."

In the case of formaldehyde, it appears that Chinese consumers have latched onto a real issue. Among the many breweries in China, "some add formaldehyde, some don't," said Xiao Derun, director of the Chinese Alcoholic Drinks Industry Association's beer department. But with the industry so fragmented and regulators reluctant to acknowledge problems, the uproar may have overstated the scope and risk of the practice.

Using formaldehyde as a beer additive isn't illegal in China. But following the flap, the biggest brewers have denied using it. Beijing Yanjing Brewery Co., one of the nation's top three beermakers, took out ads in major financial newspapers saying that it doesn't use the additive. Tsingtao Brewery Co., the country's biggest brewer, which annually exports more than 800,000 cases to the United States, made a similar statement. Many smaller brewers are keeping mum, probably because they do use it. They are quietly exploring alternatives, some of their suppliers say.

Formaldehyde is periodically rumored to be in various Asian brews: For decades, backpackers in Southeast Asia have shared urban myths about getting headaches from the chemical in the local beer. (Major brewers in Southeast Asia deny the practice.) The furor in China grew when other newspapers, picking up on the Global Times report, published dozens of zealous articles on formaldehyde's secret role in the brewing process.

Drinking the stuff sounds gruesome, but it probably isn't life-threatening. The chemical has a number of uses, from making furniture to preserving dead bodies, including that of Mao Zedong in a Tiananmen Square mausoleum. Breweries may drip formaldehyde into the mash as an inexpensive way of improving the beer's color and preventing sediment from forming during storage. Brewers in China compete fiercely on price, with a cold one costing as little as 25 cents.

It didn't take long for the formaldehyde chatter to reach China's $76 million beer export market. Japanese officials asked the Chinese government to investigate the claim and instructed importers to confirm that beer brought into Japan doesn't contain added formaldehyde.

At a July 15 news conference, officials of China's General Administration of Quality Supervision, Inspection and Quarantine assured drinkers that it had just conducted an emergency study and found an average formaldehyde content for Chinese beer of less than 0.9 milligrams per liter, the WHO's limit for the chemical in drinking water. Even when it isn't added, they noted, formaldehyde in very small quantities is a natural byproduct of the brewing process.

South Korea's Food and Drug Administration declared imported Chinese beer safe to drink after a two-week study of 13 brands showed formaldehyde levels at an average of 0.132 parts per million, well under the WHO standard.

China's state-controlled media tried to make the issue go away more than a week ago, with the headline "Rest Easy: Beer Is Safe to Drink" in the official national China Daily newspaper. Still, public distress has persisted. One post on Sohu.com, another Internet portal, questioned the government's role in the emergency study. "I don't mean [to question] the accuracy, but the administrative interference is too much!"

In the United States, formaldehyde is allowed in beer and found in other foods, in very small quantities, said Charles Bacon, program manager for beer at the Alcohol and Tobacco Trade and Tax Bureau, which regulates beer in the United States and checks products coming into the country. "We're talking a drop in the ocean," he added. Most major U.S. brewers, including Anheuser-Busch Cos., say they have never used the chemical in their products.

Though brands such as Tsingtao are well known, the United States doesn't import much beer from China -- just 9 million liters in 2003, the latest data available, according to Euromonitor. Tsingtao's U.S. distributor says the controversy hasn't affected U.S. sales.

Tony Hazzard, the technical officer in food safety at the Western Pacific regional office of the WHO, said food additives should be used only where they are required and safe. "Formaldehyde is not an essential additive in brewing processes," he said, though he noted that a WHO study on formaldehyde in drinking water completed earlier this year found little evidence that the chemical causes cancer when imbibed.

It's too early for market researchers to say whether the controversy has hurt sales. The Chinese drink as much as $20 billion in beer a year, according to the highest estimates, and right now many parts of the nation are enduring a heat wave.

But already, one company has found an advertising hook in the formaldehyde question. Shenzhen Kingway Brewery, which stopped adding formaldehyde to its beer in 2003, features a pair of computer-animated chameleons stumbling upon a dance party in the jungle in a new TV commercial.

After sneaking up to chug some beer, one of the chameleons points to the label and says: "No formaldehyde! It's healthy! It's cool!"

Sarah Ellison, Ivy Zhang and Kate Linebaugh contributed to this report.

While the Chinese government insists formaldehyde is a safe beer additive, the biggest brewers have denied using it.