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.
FUKUOKA SITUATION: Japanese media reported that the pathogen is expected to be identified by the summer, while the CDC downplayed the idea that it was hMPV A “mysterious cold-like illness” reported in Japan’s Fukuoka Prefecture does not seem to be a new disease, but Japanese authorities have been asked about the situation, the Centers for Disease Control (CDC) said yesterday. The Fukuoka Prefectural Medical Association on Wednesday told a news conference that a “mystery cold” that has become a hot topic on social media is “highly likely to be caused by some kind of viral infection,” Japan’s KBC News reported. “Many people are experiencing symptoms starting with a sore throat, followed by a runny nose, phlegm and a severe cough,” KBC News reported, citing association officials. Health authorities are
Nvidia Corp CEO Jensen Huang (黃仁勳) arrived in Taiwan yesterday ahead of upcoming AI and technology events, saying he plans to meet with clients and Taiwan Semiconductor Manufacturing Co Chairman C.C. Wei (魏哲家) during his visit. After landing at Taipei Songshan Airport, Huang posed for photos with fans and handed out Yakult drinks to reporters and supporters waiting at the scene, saying he has “a lot to do” during the trip. Asked about reports that Nvidia’s planned headquarters site in Taipei’s Beitou Shilin Technology Park could break ground on May 27, Huang said that if the company holds an event, he would
Carrefour Taiwan is to begin using a new name from the start of July, but it cannot divulge the name until then, the chairman of the supermarket chain's parent company said today. President Chain Store Co chairman Lo Chih-hsien (羅智先) was asked by reporters after a shareholders' meeting to confirm whether the company has settled on a new name for the supermarket brand. In March, the government-registered name of two Carrefour Taiwan branches was quietly changed to "Le Chia Kang" (樂家康) in Chinese, raising speculation that has been selected as the name. Lo said that because of local regulations and contractual obligations, the
The Philippines would likely be involved in any conflict over Taiwan due to its proximity to the democracy claimed by China, President Ferdinand Marcos Jr said, reiterating a stance that risks angering Beijing. “In the Philippines, we do not have a choice because Taiwan is so close to the Philippines and we have almost 200,000 Filipino nationals living and working in Taiwan,” Marcos said in an interview with Japanese media in Manila on Monday. The Philippine leader’s comments come ahead of a state visit to Japan next week, where he is to meet with Japanese Prime Minister Sanae Takaichi to discuss security
RSS