Former employee of a state-owned grain company in Youyang County, Chongqing, reported that the company repackaged 350 tons of expired rice and sold it to local primary schools, specialty stores, and hotels, providing substantial audio and video evidence. The grain company had incurred a massive loss of 5 billion yuan due to the failure of all 21 blind investment projects.
Recently, leaked reports revealed that Chongqing Grain Group’s Youyang County Grain Co., Ltd. was accused of repackaging 350 tons of expired rice into the market, with a portion ending up in rural primary schools.
According to a report by First Financial, the whistleblower stated that in June 2023, Chongqing Youyang County Grain Company repackaged expired rice dated October 2022 with new packaging and production dates. Screenshots from the whistleblower’s WeChat group chat showed that this rice was sold to various local primary schools, specialty stores, and hotels.
Based on the information provided by the whistleblower, the Prawn Fragrant Rice and Crystal Prawn Fragrant Rice produced in October and November 2022 were distributed to several units, including Longtan Hope Elementary School, Bohai Elementary School, Nanxiang Elementary School, Longtan Government Compensation Elementary School, Jiangfeng Elementary School, totaling approximately 416 bags, weighing 10.4 tons between April and July 2023.
The whistleblower, who worked at Chongqing Youyang County Grain Company for over 30 years, revealed that the county’s emergency rice reserve of 350 tons in the Banxi town granary must ensure the authenticity and effectiveness of the variety, quantity, and quality. The supervisory unit of the reserve is the county’s Development and Reform Commission.
Why would the county grain company sell expired grain? The whistleblower explained that Youyang County, being a mountainous area where many people work outside and do not grow grains, receives the reserve rice from Hubei, Qianjiang. As the company’s senior units have sales targets for local brand grains, Youyang Company repackaged the expired Qianjiang rice reserve into the new date-labeled local brand “Taoyuan Tribute Rice” to meet the sales targets and sold it to the market, including multiple rural schools.
“The regulations state that expired grain should be sold to feed companies or used for industrial alcohol purposes. It causes significant losses for grain companies, so they resort to fraud by changing packaging to deceive consumers and maximize profits,” the whistleblower stated.
Chongqing Grain Group had previously faced significant financial difficulties.
According to the Chongqing State-owned Assets Supervision and Administration Commission website, “During the ’12th Five-Year Plan’ period, Chongqing Grain Group suffered losses of over 5 billion yuan due to large borrowings and the failure of 21 projects in Brazil, Argentina, Guangdong, Jiangsu, and other regions, struggling for operation and development, leading to debt restructuring. The asset-liability ratio decreased from 168% (excluding grain reserve companies) at the end of 2020 to 70.5% by the end of 2023.”
In 2023, the whistleblower recorded a video and, a year later, reported: “I used to be unfamiliar with the Food Safety Law and had some sentiments towards the unit, only to discover that the company leaders were still engaging in illegal operations, deceiving consumers.” In May of this year, he reported to the Youyang County Market Supervision and Administration Bureau and received a response in June, although the bureau did not file a case.
The whistleblower later took the matter to other departments in Chongqing.
On October 10th, the Youyang Tujia and Miao Autonomous County Market Supervision and Administration Bureau released a “Statement” on its official website, addressing the media reports on the issue of “Chongqing Grain Group Youyang County Grain Co., Ltd. repackaging and selling expired rice.” Earlier, Chongqing Municipal Market Supervision and Administration Comprehensive Law Enforcement Headquarters had initiated an investigation based on the whistleblower’s report.
On the same day, Duan Mingqing, the former legal representative, executive director, and general manager of Youyang Grain Company and vice president of the Chongqing Grain and Oil Industry Association, as the primary leader, had been demoted due to the incident and moved to another company as a deputy last month.