Sanlu allegedly delayed revealing the practice even after baby illnesses rose, forcing its foreign partner, the New Zealand dairy firm Fonterra, to alert the Beijing government.
It is also alleged to have resisted demands to recall its product, raising concerns about poor regulation and enforcement of food safety rules in China.
Sanlu has since filed for bankruptcy, and analysts have said China's dairy industry faces many challenges if it is to recover.
Melamine has been found in a wide range of Chinese food products, some of them exported around the world.
The high publicity surrounding the trials is being taken as an indication of the central government's desire to be seen to be tackling the scandal.
The government has also announced a $160m (£110m) compensation plan, but parents and their lawyers say it is too small.
According to the BBC correspondent in Beijing, James Reynolds, there is a real sense of anger in China against the dairy producers, and also against government officials and regulators who did not do their job properly.
Chinese quality inspectors are now investigating tableware for melamine levels, following reports it becomes dangerous when hot, Xinhua reported.
China's General Administration of Quality Supervision, Inspection and Quarantine "has always put great stress on food and tableware product safety", Xinhua quoted it as saying.
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