Traces of a bacterium that can cause serious illness in newborns has been found in each of four infant formula milk factories tested.
Premature babies are particularly vulnerable
A study, published in the Lancet, looked for the presence of a bug called E. sakazakii, which can cause meningitis or severe gut infections.
The samples from the factories appear to confirm contamination of formula milk as a potential source.
The testing was carried out by Dutch researchers and funded by Nestle.
Although relatively few cases of Enterobacter sakazakii have been seen worldwide so far, it is seen as a possible "emerging infection" by health experts, possibly causing a far more serious problem in years to come.
Several outbreaks among premature babies have been recorded, and in this vulnerable group, mortality is high - between 40% and 80%.
Cases have not emerged among babies more than a few weeks old unless their immune systems have been already weakened by other conditions.
Some premature babies cannot breastfeed, or are deliberately given specially enriched formula feed from birth in an effort to maximise weight gain in the first weeks of life.
It has been suggested before that it might be possible that powdered feeds might carry these bacteria, but evidence for this is sketchy.
The researchers, from Wageningen University in the Netherlands, were funded by one of the world's biggest food - including infant formula - makers, Nestle.
They examined samples from four infant formula factories, alongside other food factories and 16 samples from households.
It was not revealed by the researchers whether these were all Nestle factories.
A small number of samples from all but one of the factories tested possible for E. sakazakii.
Five out of 16 households tested showed signs of the bacterium.
The researchers wrote: "The presence of E. sakazakii in factories producing milk powder, cereals, chocolate, potato flour and pasta, as well as in domestic environments, strongly indicates that it is a widespread microorganism.
"This should be taken into account in the design of effective control measures."
Dr Jeffrey Farber, from the Bureau of Microbial Hazards at Health Canada, said that a growing number of outbreaks of infection among premature babies provided "compelling evidence" that milk-based powdered infant formulas were a source of infection.
He said that while liquid formulas were heat-treated at high temperatures, powdered versions were not, and that blenders used to prepare the feeds later on could easily become a reservoir of infection for entire wards.
He said that it might be sensible to minimise the amount of time between the preparation of the formula and its consumption by the baby.
"The fact that the disease it causes has a very high mortality rate and that the organism affects very young infants is a cause for concern."