EY Health Products Shanghai Fined for Illegally Selling Food Without Labeling Unsuitable People

China Economic Network Beijing, December 21, 2019 Recently, an administrative penalty decision published on the website of the Shanghai Municipal Market Supervision and Administration Bureau shows that the Shanghai branch of EY (China) Health Products Co., Ltd. was fined a total of 20,500 yuan by the Shanghai Minhang District Market Supervision and Administration Bureau for producing and operating labels and instructions that did not conform to laws and regulations on food and food additives.

According to the Administrative Penalty Decision (Shanghai Municipal Supervision Min Division [2021] No. 122021004366), it was ascertained that in August 2020, the parties signed a general distribution agreement with Shanghai Yueqi Trading House (the entrusting party, hereinafter referred to as "Shanghai Yueqi") to distribute a variety of prepackaged food and daily necessities and other commodities. Among them, the following three products (Viiva plant protein solid beverage (vanilla flavor), Viiva plant protein solid beverage (cocoa flavor), and Viiva complex fruit solid beverage (hereinafter referred to as the "products involved in the case") are marked on the outer packaging with the words "[General Distribution] Ernst & Young (China) Health Products Co., Ltd. Shanghai Branch" and "[Precautions] Infants and Young Children Are Not Suitable for Consumption;". In addition, the outsourced assembly materials of the goods involved in the case all contained the ingredient of "black fruit glandular ribbed fruit fiber powder", and the outer packaging label did not indicate that it was not suitable for people (pregnant women and lactating women).

The above-mentioned goods involved in the case were produced by Qingdao Kangmaichen Biotechnology Co., Ltd. (manufacturer, hereinafter referred to as "Qingdao Kangmaichen"), which has production qualifications, and its outer packaging label was designed and produced by Qingdao Kangmaichen. At the same time, the product has a test report. In June 2021, Qingdao Kangmaichen has rectified the problem label and obtained a label audit report in July 2021. Up to now, the products involved in the case that can be verified by the parties to purchase and sell are Viiva plant protein solid beverage (vanilla flavor) and plant protein solid beverage (cocoa flavor) are 9 boxes. The value of the above-mentioned commodities is 3654 yuan, and the illegal income is 522 yuan. In addition, after the incident, the parties initiated recall procedures for the goods involved in the case.

According to the "Announcement on Two New Food Raw Materials Such as Black Fruit Glandular Ribs and Catalpa Fruit (No. 10 [2018])" issued by the National Health Commission, the addition and use of the "Black Fruit Glandular Ribs Catalpa Fruit" label should be marked as unsuitable for people, infants, pregnant women and lactating women should not be consumed.

The parties concerned violated the provisions of Item (9) of the first paragraph of Article 67 of the Food Safety Law of the People's Republic of China by selling food that was not marked as unsuitable for the above-mentioned labels (pregnant and lactating women), and constituted an illegal act of operating food that did not meet safety standards. According to the provisions of item (4) of the first paragraph of article 125 of the Food Safety Law of the People's Republic of China, the following administrative penalties are imposed on the parties: 1. Confiscation of illegal gains (RMB) Wu Bai 2 (522 yuan); 2. Fine (RMB) 2 (2) 10,000 yuan. The sum of the above two items: fines and forfeitures (RMB) 200,000 Wu Bai 2 (20,522) yuan.

After an inquiry by a reporter from China Economic Network, the Shanghai branch of EY (China) Health Products Co., Ltd. was established on July 16, 2020. EY (China) Health Products Co., Ltd. was established on December 5, 2002 with a registered capital of HK$106 million. The Company is a wholly owned subsidiary of EY International Asia Limited NU LIFE International (ASIA) LIMITED.

Rules:

Article 67 of the Food Safety Law of the People's Republic of China: There shall be labels on the packaging of prepackaged food. The label shall indicate the following:

(1) Name, specification, net content, and date of production;

(2) ingredients or ingredient lists;

(3) The name, address and contact information of the producer;

(4) Shelf life;

(5) Product standard code;

(6) Storage conditions;

(7) The generic name of the food additive used in the national standard;

(8) The production license number;

(9) Other matters that shall be indicated in laws, regulations or food safety standards.

The label of staple and auxiliary foods for infants and other specific groups of people should also indicate the main nutritional components and their contents.

Where the national food safety standards have other provisions on labeling matters, follow those provisions.

Article 125 of the Food Safety Law of the People's Republic of China: In any of the following circumstances in violation of the provisions of this Law, the food safety supervision and management department of the people's government at or above the county level shall confiscate the illegal gains and the food and food additives illegally produced and traded, and may confiscate the tools, equipment, raw materials and other articles used in illegal production and operation; It shall also impose a fine of not less than five times but not more than ten times the value of the goods; if the circumstances are serious, it shall be ordered to stop production and business until the license is revoked:

(1) Producing and trading food and food additives contaminated by packaging materials, containers, means of transport, etc.;

(2) Producing and trading unlabeled prepackaged foods, food additives, or foods or food additives whose labels or instructions do not conform to the provisions of this Law;

(3) The production and operation of genetically modified foods are not marked in accordance with regulations;

(4) Food producers and traders purchase or use food raw materials, food additives, and food-related products that do not meet food safety standards.

Where there are defects in the labels and instructions of food or food additives produced and traded but do not affect food safety and will not mislead consumers, the food safety supervision and management department of the people's government at or above the county level shall order corrections; if they refuse to make corrections, they shall be fined not more than 2,000 yuan.