Jiugui halts trading after safety claim

Shenzhen-listed Jiugui Liquor Co announced Monday a temporary halt of stock trading to protect its investors' interests after reports of food safety issues surfaced.

According to the business portal 21cbh.com Monday, three types of plasticizer (DEHP, DIBP and DBP) were found in four bottles of Jiugui liquor which were bought by 21cbh staff for 438 yuan ($70.30) per bottle and tested by Intertek China, an international third-party quality tester.

The amounts of DBP reached 1.08 milligrams per kilogram, 260 percent higher than the domestic industrial standard of 0.3 milligrams per kilogram, while the other two types did not exceed industrial standards, according to 21cbh.com.

The plasticizers are chiefly used in plastics, but recently some food producers have used them as a food additive in order to condense beverages, such as tea drinks and fruit juice, for a more appealing product.

In July 2011, China's Certification and Accreditation Administration passed the first plasticizer inspection standard to monitor the use of plasticizers in the food sector, tracking 22 types of phthalate in foods.

Consuming foods with excessive plasticizers over a long period would pose a definite health risk, since it can damage the human immune and digestive systems, Wang Shiping, a food safety professor from China Agricultural University, told the Global Times Monday.

"Low-quality plastic packages and raw materials will lead to foods and beverages having excessive plasticizers. Some business people may even artificially add plasticizers to make their products look dense and tasty," Wang said, noting that the public should only believe official food safety reports issued by the authorities.

Fan Zhen, deputy general manager of Jiugui Liquor Co, told China National Radio Monday that the company has discussed the matter with 21cbh.com and could not verify that the tested liquor product was produced by Jiugui.

Intertek China test results are dubious since the third party certification company is a commercial agency, but Jiugui has submitted its products to an authoritative testing department, Fan said, adding that the company is unsure when its stock will resume trading on the Shenzhen Stock Exchange.

The report of 21cbh.com deepened stock market gloom in the domestic liquor industry.

Shenzhen-listed Hengshui Laobaigan Liquor closed its shares 10.01 percent lower, Shenzhen-listed Wuliangye Yibin Co's stock was pulled down 5.82 percent and Shanghai-listed Kweichow Moutai Co's shares dropped 4.61 percent.

Notwithstanding the influence of this report, the drop in the liquor stock market is normal, as previous stock prices have been riding too high and demand is currently diminishing amid the sluggish economy, said Fan Jie, an industry analyst from Adfaith Consulting.