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Chinese “national liquor” brand Kweichow Moutai has gone out of its way to defend itself amid fears much of China’s supply of high-end baijiu has been contaminated with a toxic substance — an unusual move for a Chinese company faced with a product safety scandal.|
Whether the rare public relations effort had the desired effect is another question.
A customer walks past a glass case displaying Kweichow Moutai liquors with at a supermarket in Shenyang, Liaoning province August 8, 2012. The country’s largest baijiu producer by market capitalization, Kweichow Moutai issued statement earlier this week saying levels of a potentially toxic plasticizers found in its products fell within China’s permitted limit, after a local online report said tests in Hong Kong on bottles of Moutai baijiu found high levels of the chemical.
Plasticizers, also called phthalates, are often used to soften plastic food and beverage containers, and have been shown to affect the reproductive systems of laboratory animals.
The move appeared to work. Shares in Kweichow Moutai rose 1.8% on Tuesday, partially reversing a plasticizer-driven tumble in late November. But then things went south.
Possibly encouraged by the positive response to its statement, the company held a press conference on Wednesday where Li Tongji, a professor from Peking University’s School of Public Health, dismissed concerns over chemicals like plasticizers and melamine (an industrial chemical at the heart of a deadly poisoned milk scandal in 2008) , assuring wary consumers that “human beings have the ability to detox.”
The comments caused an uproar on Sina Corp.’s popular Weibo microblogging service, where furious users blasted Mr. Li for defending the company, with some calling him “unethical” and “corrupt” and questioning whether he had been paid to appear at the press conference. “In front of a stack of cash, those ‘scholars’ will even claim they gave birth to their own mothers,” said one angry microblogger.
Other Weibo users referred to Mr. Li as a “barking beast,” while still others accused him of besmirching Peking University’s reputation. “During the so-called dark period of the Republic of China, Peking University was a haven for academic freedom where people would fight with dictators to defend science,” wrote one user. “Now Peking University it is just full of trash – those who would sell their souls for money from big companies.”
Mr. Li could not be reached for comment.
Shares of Kweichow Moutai fell 2.9% on Thursday, one day after it held the press conference.
In attempting to address the problem, the company was breaking with precedent, said Wu Yongning, chief scientist at the state-affiliated China National Center for Food Risk Assessment. “When a crisis happens, Chinese companies typically say ‘I don’t have any problem’ rather than confronting it and communicating with consumers,” he said.
Kweichow Moutai’s problem, according to Mr. Wu, is that it didn’t do enough. “I don’t think they did a good job handling this so-called incident – a statement isn’t communication, it’s just a one-way thing. Nor is a press conference,” he said, adding that the company failed to engage the public by providing useful information.