China's largest meat processor, which has been putting popular products on supermarket shelves for the past two decades, suffered a major setback this week when an illegal additive was allegedly found in meat supplied by one of its affiliates.
Shares in the Shenzhen-listed Henan Shuanghui Investment and Development Co Ltd were suspended from being traded at 9:30 am on Wednesday after China Central Television reported one of the company's suppliers, Jiyuan Shuanghui Food Co Ltd, had purchased pigs that had been fed with clenbuterol. The company made meat products that were branded in English as Shineway.
Shuanghui Group, the holding company for Henan Shuanghui Investment and Development, released an announcement on Wednesday apologizing to consumers.
The announcement said the group had asked Jiyuan Shuanghui to cease production while the claims are investigated. The holding company also said it had sent an investigation team to the affiliate.
Clenbuterol, which is better known as "lean meat powder", can speed up muscle-building and fat-burning, resulting in leaner pork.
The drug is banned in China as an addictive in pig feed because it can lead to dizziness and heart palpitations among people who eat meat produced with the help of the additive.
Footage from China Central Television on Tuesday showed dozens of live pigs at a farm in Henan province that appeared to have unusually firm muscles.
"It (the firm muscles) was caused by clenbuterol being added to pig feed because, by doing so, pigs can be sold for higher prices because they have a lower fat content," a pig farmer was quoted as saying in the TV report.
The item claimed that pigs from many counties in the province had been fed the additive before being sold to Jiyuan Shuanghui and that they had not been subjected to the necessary tests.
The scandal attracted a lot of attention across the country because the company had built up a good reputation over the years for its high-quality products.
Shares in Shuanghui Investment and Development (000895.SZ) fell on Tuesday by 10 percent, the maximum allowable, and hit 77.94 yuan before trading was suspended on Wednesday.
The trading of shares in the company will resume after the relevant facts are verified, the suspension notice said.
On Wednesday, some supermarkets in Guangzhou stopped selling meat products produced by Jiyuan Shuanghui. Products made by other companies affiliated to Shuanghui remained on the shelves at most major supermarkets in the city. Some supermarkets in Shanghai also chose to take products from Jiyuan Shuanghui off the shelves, local media reported.
Consumers reacted with dismay to the allegations.
"The first thing I will do today after work is throw away all the Shineway products I have in my fridge and I will never buy any of their products again," said Liu Chang, a 26-year-old Shanghai resident.
The Ministry of Agriculture urged its local branches to conduct investigations across the country and sent a special inspection team to Henan province on Tuesday.
So far, the Henan provincial government has ordered 16 pig farms to halt sales and has impounded live pigs and 134 tons of meat products that are suspected of containing the additive.
The provincial authorities said on Wednesday that the heads of animal husbandry bureaus in the counties involved in the scandal had been suspended.
Liang Haoyi, a senior researcher in animal husbandry at the China Animal Agriculture Association, told China Daily that the current supervision of live pigs mainly relies on spot checks and is riddled with loopholes.
"For instance, almost no strict supervision is targeted at pig purchasers and some of them have actually encouraged farmers to feed pigs with illegal additives to earn more money," he said.
"Also, some substitutes, which are more difficult to test for, have been used to replace clenbuterol. The government has to strengthen its supervision immediately."
Shuanghui Group is headquartered in Henan's Luohe city and has total assets in excess of 10 billion yuan ($1.5 billion). The group has factories in 12 provinces throughout China.