Firms can be compromised by a scandal, or an “event” stigma spillover—adverse consequences arising simply from being in the same industry subcategory as other firms that are directly implicated in a socially vilified scandal. This mixed-methods study of the Chinese infant formula industry after the 2008 melamine scandal contributes to stigma management theory in three ways: first, it offers an empirical account of strategic responses to stigma spillover that arises from a scandal in a previously respected industry (as opposed to strategies used in core stigmatized industries); second, it examines how firm prominence/visibility and media scrutiny impact firms’ strategic choices; and third, it assesses the performance implications of the strategies.