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Defense Ministry to seek compensation for suspect edible oils

ROC Central News Agency

2013/11/12 19:14:40

Taipei, Nov. 12 (CNA) The Ministry of National Defense (MND) will demand compensation from edible oil manufacturers that supplied adulterated cooking oils to the military and file a criminal complaint against the vendors.

MND official Shih Wu-chiao said tests of oils supplied to military commissaries found that several products were substandard, including sunflower oils produced by Chang Chi Foodstuff Factory Co., the company at the heart of a scandal involving adulterated oils.

Shih said the ministry will seek compensation from manufacturers for the substandard oils in accordance with procurement contracts and will file a criminal complaint against them with the Changhua District Prosecutors' Office.

Colonel Shen Yau-guo, the head of the MND's commissary known as the General Welfare Service, said the ministry plans to revise the penalty clauses in procurement contracts it signs with suppliers in the future.

Instead of imposing a fine of 20 percent of a product's sales over the previous 30 days for substandard goods, as has been the case in the past, the fine may be increased to the product's total sales over the previous 180 days, Shen said.

The General Welfare Service has received more than 20,000 items from various military units worth a total of NT$3.54 million (US$119,732) since news surfaced that Chang Chi had adulterated its oils and used unauthorized additives, Shen said.

Most of the returned products were from Formosa Oilseed Processing Co., Ltd., Wei Chuan Foods Corp., noodle producer Sing Lin Foods Co. and Chang Chi.

In related news, several major edible oil distributors in China filed a cross-border civil suit against Chang Chi in Changhua District Court through their Taiwanese lawyer on Tuesday, demanding compensation of more than NT$5 million.

Of that, NT$1.86 million is for inventory losses while NT$3.4 million is to compensate the companies for damage to their reputations, said lawyer Tsai Wen-pin, who is representing the companies in the Chinese city of Xiamen.

The companies have purchased about NT$10 million in cooking oils from Chang Chi over the past year and recalled the products after the scandal broke in mid-October.

(By Claudia Liu, Wu Jhe-hao and Y.L. Kao)
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