Chang Chi said to use olive-pomace oil

ILLEGAL GAINS::Changhua’s health bureau said the firm had been making massive profits from mixing the lowest grade of olive oil and selling it as extra virgin oil

By Wu Wei-kung and Jake Chung  /  Staff reporter, with staff writer

Sat, Nov 09, 2013 - Page 1

After being tipped off by an employee at Chang Chi Foodstuff Factory Co (大統長基), Changhua County’s Bureau of Health said it found that the company had been using low-grade olive-pomace oil and mixing it with other types of cheap oils before selling it directly in markets or to big companies, such as Ting Hsin International Group (頂新集團) and Formosa Oilseed Processing Co (福懋).

Instead of importing and selling extra virgin olive oil, which costs between NT$110 and NT$200 per kilogram, as it has claimed, Chang Chi had mainly used olive-pomace oil, which costs only NT$70 (US$2.30) per kilogram, for its edible oil production, the employee told the bureau.

By mixing olive-pomace oil with 58 percent cottonseed oil and 10 percent extra virgin olive oil, Chang Chi was able to lower its costs by at least NT$50 per kilogram, and then sell the adulterated oil products to Ting Hsin and Formosa for NT$98 per kilogram, the employee said.

However, the bureau said it could not verify the worker’s claim that Chang Chi added 10 percent extra virgin olive oil, which the employee said was imported and stored in a distinctive blue barrel.

According to experts, the highest grade of olive oil comes from the first pressing, usually called cold press or extra virgin. The product from the second pressing using mechanical means is considered second-rate, and olive-pomace oil, which is extracted from the leftovers, is the lowest grade, they said.

The bureau said that Formosa Oilseed also added canola oil to the products it bought from Chang Chi, pushing down its costs to NT$64 per kilogram, before selling them as extra virgin olive oil — although they contained only about 21 percent olive oil — under its own brand.

While Ting Hsin had not adulterated the oil further, it priced its oil products at NT$306 per kilogram, nearly triple its cost, the bureau said.

Chang Chi-yue (張基郁), a professor at Dayeh University’s bioindustry technology department, said that olive-pomace oil is usually extracted by adding n-hexane as a solvent and then refined to remove n-hexane residues, which could damage the liver, kidney or the nervous system.

Changhua County Bureau of Health director-general Yeh Yen-po (葉彥伯) said the agency does not know whether Chang Chi had refined its imported olive-pomace oil.

Meanwhile, the Changhua County District Prosecutors’ Office said that over the past six years, Chang Chi had sold 386,400kg of adulterated oil to Ting Hsin and 749,000kg to Formosa Oilseed, making about NT$128 million in profit.

It added that the company had made more than NT$1.9 billion in illegal gains, through direct sales and sales to other companies.

Additional reporting by Tang Shih-ming and Chang Tsung-chiu