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Health care firm in the dock for buying 'swill oil'

By Li Qian (Shanghai Daily)

08:35, August 31, 2012

A LEADING health care product maker in China was found to have purchased 1.62 million tons of swill oil to produce a major component for antibiotics, which is widely used in the domestic market.

Jiaozuo Joincare Biological Product Co Ltd in central China's Henan Province, a subsidiary of the listed Joincare Pharmaceutical Group Co Ltd, spent 145 million yuan (US$22.82 million) between 2010 and July 2011 on "swill oil" - digouyou in Chinese - oil ladled from drains near restaurants, prosecutors said.

The dirty deal came to light during the hearing on the nation's first case on swill-oil making and selling in Ningbo, Zhejiang Province, People's Daily reported yesterday.

Prosecutors said Jiaozuo Joincare was the biggest customer of Henan Huikang Grease Co Ltd, which bought huge amounts of swill oil, blended it with good-quality oil and sold it to food and medicine processors as raw material. Jiaozuo Joincare bought the swill oil at 8,950 yuan per ton, about 2,000 yuan less than the market price.

The company admitted to purchasing oil from Huikang once, but denied knowing the oil was made from restaurant waste at that time or purchasing the oil at lower price, according to its statement yesterday. "The company will bear full responsibility if our products are plagued by quality problems," it added.

Qiu Qingfeng, board secretary of Joincare, said the company had devised four other standards in addition to the national standards to test the oil, but had still failed to detect the swill oil, National Business Daily reported.

Jiaozuo Joincare gained 941 million yuan in revenue in 2010 but the figure fell to 698 million yuan in 2011 since it stopped its contract with Huikang, triggering speculation over its attempt to cut costs by purchasing swill oil.

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