Scandal-hit liquor maker halts packaging lines

CHANGSHA - A Chinese liquor maker suspended its packaging lines on Tuesday after being hit by a plasticizer scandal.

Initial investigations indicated that liquor produced by Jiugui Liquor Co Ltd might be contaminated with plasticizer during the packaging process -- from plastic tubes and corks, according to Xia Xinguo, general manager of the firm.

Xia said only the packaging lines are suspended while the production lines are still in operation.

The scandal broke a week ago when a business news website (www.21cbh.com) reported that one kind of Jiugui liquor contained 1.08 mg per kg of dibutyl phthalate, a type of plasticizer.

The report prompted an investigation by the food quality watchdog of the Tujia-Miao autonomous prefecture of Xiangxi, in Hunan province, where Jiugui is based.

The results found the DBP in Jiugui liquor was higher than the 0.3 mg per kg standard, a provisional regulatory limit set by the Ministry of Health in June 2011.

The food quality watchdog urged the liquor maker to determine the source of the plasticizer and make sure other products were not tainted.

Plasticizers are used to thicken liquids but alcohol products do not need them, according to health experts. The chemicals can cause male reproductive problems as well as damage to the digestive and immune systems.

The scandal sent Jiugui's shares tumbling and some of its products taken off the shelves.

Shares closed at 34.69 yuan ($5.52) per share by midday Tuesday. It marked a third consecutive trading day its shares have dropped by the daily limit on the Shenzhen Stock Exchange.

Most liquor companies have seen their shares contract over 10 percent since the scandal erupted, including Wuliangye Yibin Co and Hebei Hengshui Laobaigan Liquor Co. The least-affected company, Kweichow Moutai Co, has slumped 3.3 percent.

The China Alcoholic Beverage Association said last week that large-scale tests on China's liquor showed that almost all alcohol products contained plasticizers, with an average level of 0.537 mg per kg.High-end liquor products contain more plasticizers than low-end ones.

Some industry observers defended the liquor makers because there is no law or formal regulations on the levels of plasticizers liquor products are allowed to contain.

Dai Qi, an official of Hunan Provincial Administration of Quality, Inspection and Quarantine, said the MOH has not put the provisional regulatory limit into the production standards for liquor products, so legally it is impossible to say whether Jiugui contain "excessive" amounts of the plasticizer.