China Finds Excessive Plasticizer Levels in JiuGuiJiu Liquor

Samples of liquor made by China’s JiuGuiJiu Co. (000799) contained excessive levels of plasticizer, Xinhua News Agency said, citing the nation’s quality watchdog. China distillers slumped in Shanghai and Shenzhen trading today.

Wuliangye Yibin Co. (000858), the country’s biggest liquor maker, and Kweichow Moutai Co. (600519), the world’s second-largest by market value, both dropped as much as 5.4 percent. Shenzhen-listed JiuGuiJiu remained halted.

Inspections showed as much as 1.04 milligrams per kilogram of dibutyl phthalate, or DBP, Xinhua said, citing the General Administration of Quality Supervision,Inspection and Quarantine. The health ministry had set a limit of 0.3 milligram per kilogram, the official news agency said.

Concerns over food and beverage quality have spurred the government to pledge greater consumer protection. Milk tainted with melamine, a toxic chemical used to make plastic and tan leather, was blamed for the deaths of at least six babies in 2008, with tens of thousands of children hospitalized. The government last year cracked down on the use of cooking oil reprocessed from restaurant waste.

DBP is used to flavor drinks and in plastic tubes and containers, Xinhua said separately yesterday. Tests show that almost all Chinese liquor products contain plasticizers, at an average 0.537 milligrams per kilogram, Xinhua said, citing the China Alcoholic Drinks Association. The alcohol industry is discussing limits for plasticizers in liquor, Xinhua said.

News Reports

Jishou, Hunan-based JiuGuiJiu halted trading in Shenzhen on Nov. 19, pending a response to news reports that its drinks contain excessive amounts of plasticizer, according to a company filing on that day. The company used DBP at levels 260 percent higher than allowed, the 21st Century Business Herald said this week.

The Administration of Quality and Technology Supervision of Hunan Province said on its website yesterday that it asked the company to investigate.

“Ingestion of dibutyl phthalate may cause gastrointestinal irritation, nausea, vomiting and diarrhea,” according to the website of the Scottish Environment Protection Agency.

Jiangsu Yanghe Brewery Joint-Stock Company Ltd. (002304), China’s third-biggest distiller, plunged as much as 8 percent to 91.46 yuan in Shenzhen trading, before trading at 96.66 yuan as of 10:48 a.m. local time. Sichuan Swellfun Co. (600779), part-owned by Diageo Plc (DGE), fell as much as 5.4 percent before trading at 19.09 yuan, down by 4 percent, in Shanghai trading.

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net