A food inspector had been suspended for failing to check the malpractice, the official added.
Additonal collector KP Mishra said that a joint team from the food and revenue departments had raided the factory at Chinnoni village and seized 1000 litres of synthetic milk yesterday.
The team recovered glucose, detergent and other ingredients that went into making the synthetic milk, he added.
He said that the raid was carried out following complaints to the district collector.
Mishra informed that the collector had yesterday suspended food inspector Savita Saxena.
Mishra said that the adulterated milk from the factory used to be supplied to Nova Dairy in Malanpur, Gwalior.
The owner of the raided factory has been under Food Safety and Standards Act.
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