A company in Shanghai which collects "gutter" oil. (Photo/Xinhua)
Joincare Pharmaceutical Group, which is listed on the Shanghai Stock Exchange, has been accused of using recycled waste cooking oil as an ingredient in antibiotics, reports the Shanghai Securities News.
Citing the indictment filed by prosecutors with the Ningbo Intermediate People's Court in Zhejiang province, the newspaper said Joincare was the largest user of the "gutter" oil produced by Gelin Biology Company in Jinan, Shandong province. Gutter oil refers to waste oil collected from restaurants and illegally reused.
The prosecutors said Gelin sold its gutter oil to a company called Huikang Youzhi in Henan province, which resold it to Joincare Biology Company in Jiaozuo in the same province, after mixing the oil with ordinary soybean oil.
Joincare Biology is a subsidiary of Joincare Pharmaceutical, which used the gutter oil to produce an ingredient for antibiotics.
From the beginning of 2010 to July last year, Huikang sold 16,200 tons of gutter oil for a price of 145 million yuan (US$22.9 million) to Jiaozuo Joincare, or 8,950 yuan (US$1,411) per ton, 400-2,250 yuan (US$63-$345) per ton less than Huikang charged other buyers and far less than the price of ordinary oil.
Owing to the low price of the oil, Jiaozuo Joincare registered healthy profits of 339 million yuan (US$53.5 million) in 2010, contributing almost a half to Joincare's net profit of 740 million yuan (US$116.7 million) that year, reported Shanghai Securities News.
Jiaozuo Joincare posted a loss of 43 million yuan (US$6.8 million) in 2011 because of a sharp decline in the price of the ingredients it produced, according to the company.
The newspaper quoted a source at Joincare as confirming that the company had bought oil from Huikang for a short period of time, but did not know it was recycled gutter oil. It began to buy oil from the state-run food processing company COFCO, after Huikang was caught producing gutter oil.
However, the indictment said Joincare could not have purchased the oil without knowing that something was amiss, as its price was far lower than that of ordinary oil.