Since January 1 this year, China's salt industry reform has entered the implementation stage. Lifting price controls on salt and allowing cross-province salt sales will bring competition to the salt market, and ordinary people will be able to buy a wider variety of salt at better prices. However, recently, residents reported that in Yichang, Hubei, it is difficult to find salt from other provinces in supermarkets and retail stores. What is going on?
Based on tips from residents, reporters randomly visited several supermarkets in Yichang, Hubei.
Reporter: Do you have salt from other provinces here? Yichang RT-Mart clerk: No, we only sell salt from the Yichang Salt Company. We sell whatever they have.
In another large supermarket, Walmart, reporters searched the shelves for salt and could only find one brand: Hubei's local Yunhe brand salt.
Then, reporters went to a small convenience store in Yichang, where there was also no trace of out-of-province salt.
Reporter: How many tons of salt is this? Yichang logistics distributor Qin Wanjian: Our salt, we have about 10 to 15 tons in the warehouse now, and just arrived about 20 tons.
This boss told reporters that in early January, the day after they brought the salt here, it was seized by the local salt bureau. Now, there are about three companies transporting out-of-province salt in Yichang, and they have all encountered similar situations.
Yichang Salt Bureau: Third-party logistics subcontracting is illegal
Since the state explicitly allows cross-province salt sales, why can these salts only stay in the warehouse? What is the reason for the local salt bureau seizing these out-of-province salts?
With these questions, reporters went to the Yichang Salt Bureau in Hubei. There, a deputy director surnamed Shi told reporters that logistics distributor Qin Wanjian did not directly sign a logistics distribution contract with Chongqing Salt Group, so he could not deliver these salts to supermarkets.
Deputy Director of Yichang Salt Bureau, Shi Bo: After our investigation and evidence collection, the entire Chongqing Salt Group's sales in Hubei are entrusted to a logistics company called Jinshengtong. I have not yet seen a contract with Chongqing Salt Group as the entrusting party. He (Qin Wanjian) has not provided it to us.
What is the relationship between Qin Wanjian, Chongqing Salt Group, and Jinshengtong? During the investigation, reporters learned that Chongqing Salt Group entrusted its salt in Hubei to third-party logistics company Jinshengtong for distribution. In Yichang, Jinshengtong then entrusted Qin Wanjian for distribution. The Yichang Salt Bureau believes this constitutes logistics subcontracting, which is illegal, so they seized his salt.
Deputy Director of Yichang Salt Bureau, Shi Bo: It is legal to transport goods to the sales target through a third-party logistics company. But if you go through a third-party logistics company, or even take another detour, to store goods at my business location and then conduct sales, that is actually a form of "sit-down sales" (selling from a fixed location). However, in Qin Wanjian's view, this distribution method is not illegal. In his office, he showed reporters his business license, the logistics distribution agreement with Jinshengtong, and a series of other documents.
Qin Wanjian: The contract is in line with national policy. For logistics distribution, we were entrusted by Chongqing Salt to Jinshengtong Logistics, and we are equivalent to further distributing with Jinshengtong Logistics.
Reporter: So after signing the contract, you can distribute Chongqing Salt's salt? Qin Wanjian: Yes, as far as I understand, the relevant national policies do not explicitly say otherwise.
According to the "Notice on Strengthening the Management of Salt Monopoly during the Reform Transition Period" issued by the state at the end of last year, salt wholesale enterprises can distribute salt to supermarkets, sales outlets, and end users such as food processing and catering service units through self-built logistics systems or by signing distribution contracts with third-party logistics enterprises.
So how should this be interpreted? Is Qin Wanjian's logistics distribution problematic? Reporters contacted a lawyer who has long followed the salt system reform.
Lawyer from Shanghai Pengzhi Law Firm, Zou Jialai: After the reform, salt production enterprises can operate through four methods, one of which is to use qualified logistics distribution companies for logistics. The regulation does not specify whether they can further entrust or prohibit further entrusting logistics distribution. There is no such restriction.
Cross-province salt sales encounter "roadblocks" in many places
In fact, it is not only in Yichang, Hubei, that out-of-province salt has been seized. Since the national salt reform was implemented this year, many other regions have also seen seizures of out-of-province salt, with various reasons given.
- On January 2, 30 tons of salt from Shandong Feicheng Refined Salt Factory were seized by local salt law enforcement after entering Xinye County, Henan, on the grounds of lacking administrative licensing. A staff member in Xinye said that out-of-province salt can be sold locally, but must obtain local permission.
- On February 20, in Laiyang, Shandong, salt from a Chongqing salt factory was seized by the local salt bureau on suspicion of illegal operation after entering the local distributor's warehouse.
Sales manager of Chongqing Suote Salt Factory, Zhou Heng: They required us to enter the Shandong salt traceability platform and obtain the local Laiyang food circulation license. This is inconsistent with Document No. 211.
- Over a hundred tons of salt seized in Suqian and Nanjing
In the three months since the salt reform transition period began, despite holding salt wholesale licenses, Anhui national salt production enterprise CNSG Dongxing's distribution center warehouses and retailers in various places in Jiangsu have repeatedly been subjected to "advance registration and preservation" of salt by Jiangsu's municipal salt administration bureaus on grounds of "suspected illegal operation" or "suspected selling unqualified salt products." Dai Jiayou, director of the legal affairs office of CNSG Dongxing Salt Chemical Co., Ltd. (hereinafter "CNSG Dongxing"), believes that CNSG Dongxing's cross-province operations comply with salt reform regulations and do not constitute illegal operation, and all salt it produces and sells is qualified. The statements by Jiangsu salt bureaus have no factual basis.
On the evening of March 31, a person in charge surnamed Wang from the Research and Supervision Office of the Jiangsu Provincial Salt Administration Bureau said: The third-party logistics distribution company entrusted by CNSG Dongxing is suspected of illegally operating salt, so it was investigated and dealt with according to law. Currently, the salt administration department is still collecting evidence and has not yet made an administrative penalty decision against the parties involved. In response to this statement, on the evening of March 31, Fei Keyu, the person in charge of the third-party logistics distribution company in Suqian and Nanjing where the most salt was seized, immediately denied it: "We are just delivering goods for a production enterprise with a wholesale license; it is impossible for us to wholesale. If we were really operating without a license, why not transfer us to public security for legal handling? The salt bureau is making excuses for itself."
On April 1, Dai Jiayou explained to reporters that none of CNSG Dongxing's third-party logistics distributors engage in wholesale of CNSG Dongxing salt. "We have arranged our own sales personnel in each region, and all sales revenue goes into our company account."
Fei Keyu is the person in charge of CNSG Dongxing's third-party logistics distribution companies in Suqian, Nanjing, and Taizhou.
According to incomplete statistics he provided, among various places in Jiangsu, Suqian and Nanjing rank first and second respectively in the amount of salt registered and preserved.
As of March 31,
- In Suqian, about 226.82 tons of CNSG Dongxing salt were registered and preserved in the distribution center warehouse this year, and at least 45.3 tons of CNSG Dongxing salt purchased by Suqian market customers were registered and preserved;
- In Nanjing, about 196.53 tons were registered and preserved in the distribution center warehouse this year, and about 5.74 tons of salt sold to Nanjing market customers were registered and preserved.
From the salt wholesale license obtained by CNSG Dongxing, it was granted the license on October 27, 2016, allowing it to operate salt outside Anhui Province. However, in Jiangsu, whether in distribution center warehouses or retail customers, the frequency of CNSG Dongxing's salt being seized exceeded their imagination.
"Roughly estimated, since January 1, 2017, our company has had salt seized 67 times, totaling about 750 tons," Dai Jiayou said. As of press time, there has been no resolution for the salt seized in various places in Jiangsu. Fei Keyu said that due to repeated seizures in various places in Jiangsu, the distributor can only deliver no more than 200 tons of salt per month, while their original delivery plan was about 5,000 tons per month.
Jiangsu Salt Bureau Document: CNSG Dongxing Illegal Operation
On March 13, a red-headed stamped document with document number Su Yan [2017] No. 9 (hereinafter "Document No. 9") was issued by the Jiangsu Provincial Salt Administration Bureau, listing "CNSG Dongxing's illegal salt operation in Jiangsu Province." Four other enterprises were also listed as "illegal/irregular salt operation." The document stated: "For the above-mentioned enterprises that illegally or irregularly operate salt, the local salt bureau shall order them to rectify, with a rectification period of 6 months. After the rectification period ends, after verification by the municipal salt bureau and approval by the provincial salt bureau, they may continue salt sales operations in Jiangsu Province." The document was signed by Tong Yuxiang, director of the Jiangsu Provincial Salt Administration Bureau.
However, both CNSG Dongxing and the third-party logistics distribution companies said they had not received the notice. "Around mid-March, our retailers had salt seized, and the law enforcement officers said we were operating illegally, mentioning a notice," Dai Jiayou said. CNSG Dongxing later saw the electronic version of the notice through other channels. "This is a serious infringement on the company's reputation and rights," Dai Jiayou said.
On the evening of March 31, the person in charge surnamed Wang from the Supervision Office of the Jiangsu Provincial Salt Bureau introduced Document No. 9 to reporters: "This is an internal guiding document of the provincial bureau, and specific administrative penalties will be imposed by each municipal bureau based on the illegal facts." Regarding whether CNSG Dongxing was seized because it was listed as an "illegal operation enterprise" in the notice, the person in charge said the provincial bureau had not learned of such a situation.
As for why CNSG Dongxing was listed as an illegal operation enterprise, the person in charge said the company's illegal salt operation facts are clear and the law enforcement basis is sufficient, and grassroots law enforcement units are further investigating and collecting evidence. It is worth noting that on March 9, 2017, the official website of the Jiangsu Provincial Salt Bureau announced the first batch of 9 out-of-province companies that could conduct cross-province salt sales. At that time, CNSG Dongxing was not among them. On March 28, the official website of the Jiangsu Provincial Salt Bureau announced the second batch of companies approved for cross-province operations. The announcement said that because they had supplemented the provincial bureau with the main information of the enterprises, including CNSG Dongxing, a total of 16 out-of-province companies could conduct cross-regional salt wholesale operations in Jiangsu Province.
In response, the aforementioned person in charge surnamed Wang explained that the list was originally published in batches and was not a prerequisite for out-of-province salt production enterprises to operate across provinces. However, on the evening of March 30, Wang Tongyin, director of the Salt Policy and Legal System Division of the Taizhou Salt Bureau, gave a different statement: The reason Taizhou seized salt from CNSG Dongxing was that CNSG Dongxing "was not on the list of cross-regional salt wholesale enterprises published by Jiangsu Province on March 9."
Salt bureaus say salt enterprises exploit loopholes; salt enterprises accuse salt bureaus of local protectionism
Regarding the seizure of salt, salt enterprises and salt administration often have significant differences. Salt administration departments believe that the seized salt production enterprises are exploiting loopholes during the policy transition period, while salt production enterprises believe that the salt administration is using law enforcement as a pretext to protect their local interests. A provincial salt administration official even said bluntly that if provincial salt production enterprises want to "go out," they will inevitably encounter local protectionism.
Song Zhanjing, secretary-general of the China Salt Industry Association, said in an interview with CNR that the problems encountered during the implementation of the salt reform policy are related to the fact that laws and regulations are being revised. "There is no authoritative interpretation now, so it is difficult to determine whether it is illegal or not on these issues."
It is worth noting that on February 21, Wang Qiang, inspector of the Economic System Comprehensive Reform Department of the National Development and Reform Commission, said that in actual operation, there are indeed salt production enterprises that have irregularities, such as franchising and sub-wholesaling. But relatively speaking, the phenomenon of local salt administration departments setting up various administrative barriers is more prominent.
How to straighten out the coherence of laws and regulations?
Local administrative licenses, local food circulation licenses, and various other policies seem reasonable on the surface, but in fact they become roadblocks to cross-province salt sales. If these roadblocks are not removed, the national salt reform policy will be difficult to implement. Therefore, how should these local regulations be defined? And how should the coherence and operability from national laws and regulations to local regulations be straightened out? This is also an urgent problem that salt reform needs to solve.
Salt bureaus cannot be separated from salt companies, delaying the salt reform process
So why have various places set so many thresholds for out-of-province salt? What is the motivation behind this?
During the investigation, reporters saw a notice issued by the Yichang Salt Bureau on January 5, stating that units or individuals engaged in salt retail, food pricing, and catering services must purchase salt from enterprises with salt wholesale licenses. As of now, only Hubei Salt Group Co., Ltd. Yichang Branch and its county and city branches have salt wholesale qualifications within Yichang.
In Yangzhou, Jiangsu, the Salt Administration Bureau privately made it clear that selling out-of-province salt is not allowed.
The "Salt Industry System Reform Plan" stipulates that salt production enterprises are allowed to enter the circulation and sales fields, independently determine production and sales quantities, and establish sales channels. So why do these salt bureaus restrict the entry of out-of-province salt? Professor Xu Guangjian of Renmin University of China said that the root cause is to protect the interests of local salt companies, and local salt companies and salt bureaus are the same entity.
Xu Guangjian, Executive Deputy Dean of the School of Public Administration and Policy at Renmin University of China: The salt company and the salt administration department certainly have reservations about the reform. This is understandable because it truly touches their vital interests. That is where the difficulty lies. They will find various reasons to maintain their vested interests.
According to data provided by a salt factory head to reporters, taking one ton of ordinary iodized salt as an example, before and after the reform, its retail price is about 4,000 yuan. But relying on the monopoly, local salt companies can obtain nearly 3,000 yuan in gross profit from it. After the reform, these salt companies have to participate in market competition, and their profits have decreased by nearly 1,500 yuan.
Currently, there are more than 170 salt production enterprises nationwide. With intensified competition, market-based elimination and reshuffling will accelerate. In this process, if local salt bureaus cannot be separated from salt companies and cannot change the relationship of "one prospers together, one suffers together," it will intensify contradictions during the reshuffling and delay the salt reform process.
Professor Xu Guangjian of Renmin University of China: In a sense, you are an enterprise, but you also exercise a certain administrative monopoly power. If this is not changed, then I think the reform cannot move forward. Why? Because they will use their so-called administrative power to restrict others from entering the market and set obstacles for others, so competition cannot unfold. Therefore, the fundamental goal of salt industry system reform is to accelerate the reform of the salt monopoly system.
This article is compiled and edited by Reference: Salt Encyclopedia -END-