Shuanghui Stock Falls 5% After Antibiotic Scandal, May 28

A subsidiary of 000895.SZ produced pork with lincomycin residue 37.5 times above China’s legal limit. Regulators detected the contamination in a sample from a retail store on May 14. The parent company issued an apology on May 28 and launched a full inspection. The stock fell 5% to 24.52 yuan on May 26, erasing 4.47 billion yuan in market value.

What the Test Found

Heilongjiang’s market regulator tested pork from Wangkui Shuanghui Beidahuang Food, a subsidiary 75% owned by Shuanghui Development. The sample contained 7,700 micrograms per kilogram of lincomycin. China’s standard allows only 200 micrograms per kilogram. The product was produced on August 27, 2025, and sold at a retail store in Heilongjiang province.

Health Risks and Company Response

Long-term or excessive lincomycin exposure can cause nausea, vomiting, diarrhea, and allergic reactions. Severe cases may lead to pseudomembranous colitis or blood cell damage. On May 28, Shuandhui issued an apology and formed a task force to inspect the subsidiary. The company stated that from October 2025 to May 28, the subsidiary tested 5,892 lincomycin samples, all passing. Regulators tested only 3 samples from the subsidiary, all passing.

Pattern of Food Safety Issues

This is not Shuanghui’s first food safety scandal. In 2011, a subsidiary was caught using clenbuterol, a banned drug, in pork for ham sausages. In March 2022, another subsidiary’s production facility was exposed for poor hygiene, including workers not following decontamination protocols and food falling on the floor before being packaged. The company processes 10,000 tonnes of meat daily across China.

Stock Impact and Next Steps

The stock fell 5% to 24.52 yuan on May 26 after the scandal became public. It recovered slightly on May 27 and 28. Shuanghui said it will strengthen source control, increase testing frequency, and improve traceability across all its slaughterhouses. The company invited public oversight of its corrective measures.

Final Thoughts

Shuanghui’s 5% stock drop reflects investor concern over food safety controls and repeated scandals. The company’s claim that most tests passed internally does not address why regulators caught a severely contaminated batch in retail stores, raising questions about quality oversight.

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