Public health authorities in Kaohsiung levied a fine of TWD50m (US$1.67m) on Chang Guann, an established cooking oil supplier, according to Xinhua, China’s official news agency.
Last week, Taiwanese police uncovered an illegal ring who they claimed had manufactured hundreds of tonnes of the gutter oil at around a dozen unlicensed sites in Kaohsiung and Pingtung before selling it on for use by some 1,020 retail businesses.
Six people were arrested in the sting, including a deputy manager of Chang Guann and the owner of an animal feed manufacturer Ching Wei Co.
At the time, Taiwanese Premier Jiang Yi-huah ordered all food and oil products produced by 235 local companies to be removed from shelves after tests showed they had all used gutter oil bought from the ring.
“Premier Jiang was pained to find such a serious irregularity and ordered that relevant authorities and agencies continue their inquiries into the case and mete out severe penalties against those involved in the scandal,” Cabinet spokesman Sun Li-jen said last week.
Chang Guann allegedly produced 782 tonnes of lard from the oil, before selling it on to 235 food companies and restaurants, including leading brands such as Wei Chuan Corp and 85'C Bakery Cafe, a government spokesman said.
Chang Guann’s chairman, Yeh Wen-hsiang, has made a public apology, and acknowledged that the company has been buying the tainted oil since February 25.
“As of last month, a total of 243 tonnes of lard had been bought from the factory, 216 tonnes of which have been used as a base oil in the manufacturing of 780 tonnes of edible lard oil,” the accompanying statement said.
Authorities across Taiwan have as yet tracked down 730 tonnes of tainted lard, with 161 tonnes of oil inventories seized and 246 types of related food products removed from shelves.
Chang Guann is also being investigated by Taiwan’s food and drug watchdog and Hong Kong authorities for the import of 300 tonnes of lard from SAR trading company Globalway, which reportedly had purchased lard oil for industrial purposes.
Lard passes tests
In a further twist, Chang Guann's lard has so far passed all hygiene tests, although heavy metals testing is still in progress, said Taiwan's public health authority.
However, Sun Lih-chyun, spokesperson of Taiwan' s administrative authority said the products were still illegal, despite the test results.
Sun added that the country’s food safety authorities plan to come down hard on those who have broken food safety regulations, and have already increased fines for convicted companies.
The China Daily has reported that consumers across the island have been clamouring for refunds after buying pastry products, regardless of whether their supplier has been implicated in the scandal. One renowned pastry store in Taipei was forced to refund over TWD10m (US$333,000) in one day, according to the paper.
Last October, some olive oil in Taiwan was found to contain low quality substitutes and a banned colouring agent.