First case in 60 years: Council of Agriculture revokes Quanshun grain trader license; Quanshun holds nine licenses, Consumers' Foundation slams it as a show

Quanshun Food Company, the third-largest grain trader in Taiwan, China, was exposed in August this year for its "Shanshui Premium Long Grain Rice," which was marketed as Taiwan rice but was in fact entirely mixed with cheaper Vietnamese rice, not containing a single grain of Taiwan rice. After multiple subsequent violations, the Council of Agriculture announced today that it is revoking Quanshun's grain trader license. Once the official document is delivered tomorrow, all of the company's products must be pulled from shelves the following day, marking the first such case in sixty years.

However, Quanshun chairman Li Dongchao also holds a grain trader license for "Shanshui Rice Industrial Co., Ltd." Together with his wife, son and relatives, the family holds a total of nine grain trader licenses. The processing and rice milling plants registered under Quanshun can also be transferred directly to Shanshui Rice. Consumers' Foundation secretary-general Lei Lifen sharply criticized the move, saying the Council of Agriculture is merely putting on a show, "not even doing half a proper job!" She called for a thorough review of the existing grain trader licensing system so that bad operators are driven completely out of the market.

First time in 60 years a grain trader has had its license revoked for violations

Previously, the "Directions for Discretionary Sanctions in Cases Violating the Food Administration Act" stipulated that license revocation for grain traders was determined by product, and a single item had to violate the rules three times before revocation was required, which was criticized as not being strict enough. On September 18, the Agriculture and Food Agency amended the regulations to base the decision on the operating entity (the grain trader): three violations in a single year, with no improvement found upon reinspection, would be grounds for license revocation. After the new rules took effect, Quanshun was again caught four times for mixing in Vietnamese rice, false labeling and other violations. The Council of Agriculture announced today that it is revoking Quanshun's grain trader license, and once the official document is delivered tomorrow, all of Quanshun's more than 80 products must be pulled from shelves.

Agriculture and Food Agency Director-General Li Canglang said that after the license revocation, Quanshun must stop its rice trading, brokerage, warehousing, processing, import and export operations, and can no longer purchase public grain. Quanshun may reapply for a license after one year, but the Council of Agriculture will review the application strictly.

The Quanshun family holds nine licenses, and products can still be listed under the Shanshui Rice name

But Quanshun chairman Li Dongchao and his family hold a total of nine grain trader licenses: Quanshun Food Co., Ltd., Shanshui Rice Industrial Co., Ltd., Hongwei Grain Firm, Jiahe Co., Ltd., Daohe Grain Firm, Yawei Grain Firm, Weichuang Grain Firm, Ruizhi Grain Firm, and Hezhangwu Trading Co., Ltd. Li Dongchao alone holds two licenses, for "Quanshun Food Company" and "Shanshui Rice Industrial Co., Ltd." So even if Quanshun's license is revoked, as long as the products are repackaged and relaunched under the Shanshui Rice company name, consumers can still see the "Shanshui Rice" brand in supermarkets.

In addition, although Quanshun's rice milling plants may not process rice, they can still be rented out to Shanshui Rice for use. Li Canglang said that rice milling plants, warehouses and the like are the operator's private property, and as long as they are not used under the Quanshun name, agricultural authorities have no way to regulate private transfers between operators.

Li Canglang stressed that although operators can still list products under other grain trader licenses, the revocation affects consumer perception, and building a brand is not easy. "There is no need to hunt operators down to the last one. We hope this incident teaches operators a lesson so they will not dare to offend again."

Consumers' Foundation sharply criticizes the Council of Agriculture for putting on a show

The Council of Agriculture rarely showed such resolve, but Consumers' Foundation secretary-general Lei Lifen believes that since the Council of Agriculture knew grain traders often hold many licenses, it should have thought of their other licenses when revoking one. "The Council of Agriculture is simply putting on a show, coming up with an approach that does no harm to the operator and can still answer to society." She believes the move exposes the problem of overly lax issuance of grain trader licenses; the two major grain traders Sanhao Rice and Zhongxing Rice also hold multiple licenses at the same time. If the Council of Agriculture truly intended to make an example of one to warn others, it should find a way to render the same operator's other licenses useless. The current approach, she said, "has not even completed half the job."

In response to the Council of Agriculture's statement that it does not want to hunt operators down to the last one, Lei Lifen retorted: "Why sympathize with the operator? They are the ones who destroyed their own reputation." She believes that even if Quanshun or Shanshui Rice's reputation is affected, consumers do not look at who the grain trader is when buying rice; as long as another brand is launched, consumers may still buy it. The Council of Agriculture should thoroughly revise the food administration regulations so that bad operators disappear completely from the market.

Liu Zhiwei, chief executive officer of the Taipei Grain Association, also believes that revoking Quanshun's license does not have much impact on them, but controlling the grain trader licenses of a single operator is not easy. "Even for drunk driving, there are drivers who use someone else's license to take the fall." To curb bad operators, penalties should be raised so that operators understand how great the price of violating the rules can be.