Milk products tainted with melamine - a chemical normally used in plastic manufacturing - are being blamed for at least four infant deaths, and have made more than 54,000 other babies and children sick.
The scandal has renewed global concerns over the safety of Chinese-made products and led to recalls of dozens of products.
On Sunday officials at Hong Kong's Centre for Food Safety said they had found high levels of melamine in chocolate products made by British-based confectionary maker Cadbury at its factory in Beijing.
They said two products - Cadbury's Dairy Milk Hazelnut Chocolate Bulk Pack and Dairy Milk Cookies Chocolate - both contained melamine well above the territory's legal limit.
Tainted milk has sickened more than 50,000 children [GALLO/GETTY]
Also on Sunday Iran became the latest country to announce a ban on the import of Chinese dairy products.
Iranian state media said any suspect products already on the market would be destroyed by health inspectors.
In an effort to limit damage from the scandal, Chinese authorities have promised to step up inspections and mete out stiff punishments for anyone caught deliberately contaminating food products.
In a raft of new tests conducted in the wake of the scandal, China's food quality watchdog said on Sunday it had found no melamine in milk powder currently on sale in the country.
The General Administration of Quality Supervision, Inspection and Quarantine said it had tested 129 batches of baby milk powder and 212 batches of other kinds of milk powder produced after September 14 when the contamination scandal broke.
Melamine can cause kidney stones and other painful and potentially deadly complications, particularly in small children.
It is thought to have been added to the milk supply chain by producers looking to fool quality tests by covering up watered-down milk.
Melamine has a high nitrogen content which can trick tests for protein levels.