Shares of Wei Chuan Foods Corp (味全食品工業), one of the nation’s leading food product suppliers, took a beating yesterday morning after the company announced the previous night that it was recalling 12 products said to be made with recycled waste oil.
Many investors have feared that the revelation that Wei Chuan used problematic oil to make its products has raised concerns over food safety, which is likely to adversely impact the bottom line of the food sector, dealers said.
The selling of Wei Chuan shares spread to other food stocks, particularly edible oil makers, to send the entire food sector into a tailspin, they added.
Wei Chuan opened down 7 percent, the maximum daily decline, where it stayed until the end of the session to close at NT$40.40. Dealers said that the stock could suffer more downward movement.
Selling in Wei Chuan spread to other food stocks, with Ve Wong Corp (味王), a local manufacturer of food, drinks and seasonings, down 3.32 percent at NT$23.30 and Gourmet Master Co (美食達人) down 4.23 percent at NT$238.00. The food sub-index ended down 1.29 percent.
The weighted index on the Taiwan Stock Exchange closed 0.22 percent lower at 9,407.94 points.
“The oil issue revealed by Wei Chuan has hit consumer confidence in the local food business hard,” Hua Nan Securities analyst Kevin Su (蘇俊宏) said. “It was no surprise that shares of Wei Chuan faced heavy downward pressure soon after the local bourse opened, and the weakness continued with no signs of any immediate rebound.”
According to Su, there have been piling orders placed by investors, waiting to sell an additional 4.4 million Wei Chuan shares in yesterday’s morning session.
The current share price of Wei Chuan is a new low since January last year.
“Wei Chuan’s daily turnover reached about 1 million shares on average. The selling orders could push the stock down further at a time when many investors have been afraid that the impact from recycled oil problems will snowball,” Su said.
On Thursday, Wei Chuan said it was recalling 12 products, including its popular pork canned fiber and meat paste, after it admitted they had been made using oil provided by Kaohsiung-based Chang Guann Co (強冠企業) since April. Wei Chuan promised consumers a refund of these products.
The Chan Guann product used material provided by an illegal Pingtung County-based company which, according to prosecutors, reclaimed oil from kitchen waste.
Wei Chuan said the recall and refunds could cost it NT$45.83 million, and the inventory of problematic products could cost another NT$33.58 million, bringing total losses to about NT$80 million.
In November last year, Wei Chuan was caught using adulterated ingredients in 21 of its edible oil products.
In the first half of this year, Wei Chuan posted NT$0.85 in earnings per share, down NT$1.09 from the same period last year.
China might accelerate its strategic actions toward Taiwan, the South China Sea and across the first island chain, after the US officially entered a military conflict with Iran, as Beijing would perceive Washington as incapable of fighting a two-front war, a military expert said yesterday. The US’ ongoing conflict with Iran is not merely an act of retaliation or a “delaying tactic,” but a strategic military campaign aimed at dismantling Tehran’s nuclear capabilities and reshaping the regional order in the Middle East, said National Defense University distinguished adjunct lecturer Holmes Liao (廖宏祥), former McDonnell Douglas Aerospace representative in Taiwan. If
TO BE APPEALED: The environment ministry said coal reduction goals had to be reached within two months, which was against the principle of legitimate expectation The Taipei High Administrative Court on Thursday ruled in favor of the Taichung Environmental Protection Bureau in its administrative litigation against the Ministry of Environment for the rescission of a NT$18 million fine (US$609,570) imposed by the bureau on the Taichung Power Plant in 2019 for alleged excess coal power generation. The bureau in November 2019 revised what it said was a “slip of the pen” in the text of the operating permit granted to the plant — which is run by Taiwan Power Co (Taipower) — in October 2017. The permit originally read: “reduce coal use by 40 percent from Jan.
‘SPEY’ REACTION: Beijing said its Eastern Theater Command ‘organized troops to monitor and guard the entire process’ of a Taiwan Strait transit China sent 74 warplanes toward Taiwan between late Thursday and early yesterday, 61 of which crossed the median line in the Taiwan Strait. It was not clear why so many planes were scrambled, said the Ministry of National Defense, which tabulated the flights. The aircraft were sent in two separate tranches, the ministry said. The Ministry of Foreign Affairs on Thursday “confirmed and welcomed” a transit by the British Royal Navy’s HMS Spey, a River-class offshore patrol vessel, through the Taiwan Strait a day earlier. The ship’s transit “once again [reaffirmed the Strait’s] status as international waters,” the foreign ministry said. “Such transits by
ECHOVIRUS 11: The rate of enterovirus infections in northern Taiwan increased last week, with a four-year-old girl developing acute flaccid paralysis, the CDC said Two imported cases of chikungunya fever were reported last week, raising the total this year to 13 cases — the most for the same period in 18 years, the Centers for Disease Control (CDC) said yesterday. The two cases were a Taiwanese and a foreign national who both arrived from Indonesia, CDC Epidemic Intelligence Center Deputy Director Lee Chia-lin (李佳琳) said. The 13 cases reported this year are the most for the same period since chikungunya was added to the list of notifiable communicable diseases in October 2007, she said, adding that all the cases this year were imported, including 11 from
RSS