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NE China province closes six companies after shoddy rice scandal

(Xinhua)
Updated: 2010-07-17 00:04
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HARBIN  -- Authorities in northeast China Friday said they have closed six grain companies following a media report saying they sold fake high-quality rice.

State broadcaster CCTV reported Monday that six grain firms in Wuchang and six more in the northwest city of Xi'an added artificial essences to make common rice look like Wuchang rice, a popular brand grown in the northeastern Heilongjiang province.

Wuchang Mayor Yao Zhibo said authorities in the rice growing region had closed the six companies and launched sweeping quality inspections of all grain companies.

However, the government had found no businesses making or selling fake Wuchang rice in the local market, Yao said.

The government would order regular quality inspections of local companies to prevent the production of fake Wuchang rice, he said.

Local grain businesses were hard hit by the scandal. The six companies at the center of the scandal had seen up to 80 percent of orders canceled.

The closures, however, did not affect exports of Wuchang rice as the six companies had no export business, Yao said.

Wuchang exports 3,000 to 5,000 tonnes of the quality scented rice each year mainly to the Republic of Korea.

The quality of exports was ensured as the production chain was relatively secure and rice designated for export was not sold elsewhere, he said.

The food quality regulator in Xi'an has seized 58.6 tonnes of rice from 16 companies, including 3.4 tonnes of fake Wuchang rice that was a blend of common rice and higher-priced quality rice.

Wuchang rice sells for up to 10 yuan per kg, while common rice sells for 3 to 4 yuan per kg.

The Xi'an municipal bureau of quality supervision, inspection and quarantine Tuesday ordered the 16 companies to close until the problems were rectified and to recall all the substandard rice.