Scandal-hit liquor maker tumbles for 3rd day

BEIJING - Shares of scandal-tainted Chinese spirits producer Jiugui Liquor Co slid by the 10-percent daily limit by 11:30 am Tuesday, following reports of a production suspension.

It marked the third consecutive trading day that Jiugui shares have dropped by the daily limit on the Shenzhen Stock Exchange since resuming trading on Friday.

Jiugui shares closed at 34.69 yuan ($5.52) per share by midday Tuesday.

Media reports said the liquor maker would suspend production on Tuesday for equipment upgrades, echoing an announcement issued by the company on Monday.

On Monday, the company said that it would shut down all assembly lines on Tuesday in a bid to replace the plastic parts in equipment that the firm believes contaminated its products with toxic chemicals, according to a Beijing News report on Tuesday.

The Hunan-based company will scrutinize every link in its transportation and packaging processes to determine the cause of the contamination and make rectifications, it said in a statement on its website on Friday.

Such rectification work is expected to be completed by the end of the month, according to the statement.

However, the Hunan-based liquor producer has no further plans to recall relevant products. "The reason is that we want to make concerted efforts to pull through the rectification measures well," Xia Xinguo, the company's president, said Monday.

Prior to suspending production, the company had previously apologized twice to consumers and investors on its website.

Since the company's products were found to contain a plasticizer, as confirmed by the national quality watchdog, the sector has seen declines across the board, with the liquor sector shedding 3 billion yuan in market value in the last two trading days.

Losses in the sector totaled 50 billion yuan over the previous eight trading days.

Most liquor companies have seen their shares contract over 10 percent since the scandal erupted, including Wuliangye Yibin Co and Hebei Hengshui Laobaigan Liquor Co. The least-affected company, Kweichow Moutai Co, has slumped 3.3 percent.