On March 27, the warehouse of China Salt Dongxing in Suqian was inspected again, and all stored salt was "registered and preserved" by the Suqian Salt Bureau. The photo shows salt bureau staff climbing through a window for inspection. Source: China News Service

Since January 2017, eight salt companies nationwide have had over 2,000 tons of salt seized by local salt administration bureaus and other authorities, with some companies facing hundreds of seizures. If estimated based on the common 500g per bag specification, the seized salt amounts to over 4 million bags.

According to interviews with companies and media reports, local salt administration bureaus have gone to great lengths to seize salt products from out-of-province companies—using flashlights at midnight, prying open warehouse doors, and setting up ladders to climb through windows. Even the "salt industry leader," China National Salt Industry Corporation's Dongxing Company, complained that it was listed as an illegal product on Yangzhou local TV, and its delivery trucks were mysteriously fitted with GPS trackers.

In this fierce battle of salt industry reform, conflicts have intensified as local salt bureaus continue to seize goods from out-of-province companies.

Since January 1, 2017, the salt industry system reform has been officially implemented, allowing designated salt production enterprises to operate across regions for the first time, breaking the long-standing model where salt could only be sold through local salt company channels. However, this "salt reform" wave has triggered strong backlash nationwide, with many salt companies encountering goods being temporarily seized or confiscated when selling across regions.

A Beijing News reporter found that as of the end of March, eight salt companies had over 2,000 tons of goods seized by local salt departments when selling salt in Jiangsu, Guizhou, Henan, and other places. Even state-owned giants like China National Salt Industry Corporation had over 1,000 tons of salt detained in Shaanxi and Jiangsu, with more than 137 seizures.

While salt operations repeatedly face cross-provincial seizures, the contradiction between salt companies and regulatory authorities has become prominent.

On March 13, the Jiangsu Provincial Salt Bureau issued a list of out-of-province salt companies operating illegally, stating that five companies were selling substandard salt products or products not meeting national regulations in Jiangsu. However, the four listed companies issued public statements claiming the notice was arbitrary, lacked legal basis, and was actually local protectionism under the guise of salt safety.

Hong Tao, director of the Commercial Economy Research Institute at Beijing Technology and Business University and professor of economics, said that market-oriented reform of the salt industry is a trend, but there is currently a conflict between the administrative functions of salt regulatory authorities and the market competition environment. Separating salt enterprises from salt administration is the key to resolving the current chaos.

Seizures: Over Eight Salt Companies, More Than 2,000 Tons of Salt, Detained Across Provinces

"The local salt administration bureau first asked us to file records, saying the procedures were fine, then asked for the warehouse address. A few days later, they came to the warehouse, inspected it, and took away 1,447 bags of edible salt," said Zhang Xiuzhong, deputy director of the Jiangsu direct sales office of Hubei Guangyan Lantian Salt Chemical Co., Ltd., to Beijing News.

According to materials provided by Hubei Lantian, on the evening of January 17, its warehouse in Taicang, Suzhou, was opened by the Taicang Salt Administration Bureau together with local police, and 28.94 tons of edible salt were taken away for sampling and evidence preservation.

On January 17, 14,478 bags of edible salt from Hubei Lantian were seized for "non-compliant iodine content."

The Taicang Salt Administration Bureau issued a salt administration enforcement notice on the spot, citing violation of Article 16 of the "Regulations on Salt Iodization to Eliminate Iodine Deficiency Disorders," which requires that iodized salt sold in iodine-deficient areas must meet the specified iodine content.

However, according to the inspection report provided by Hubei Lantian from the Hubei Provincial Salt Product Quality Supervision and Inspection Station, the iodine content of its salt products was within the qualified range. "Our iodine content standard is 18-33 mg/kg, and we have qualified test reports."

On March 14, the Taicang Salt Administration Bureau again seized 28 bags (20kg per bag) of refined iodized salt from Hubei Lantian at a local vegetable market retail store, citing violation of Article 14 of the "Salt Monopoly Measures," which states that "salt retail units should purchase salt from local enterprises with salt wholesale licenses."

However, Zhang Xiuzhong claimed that the Taicang bureau's reason was not valid. According to the salt reform documents, retail and user units can purchase salt from qualified enterprises outside the region, so the word "local" does not apply. They had already obtained the local salt wholesale license.

All documents sent by Hubei Lantian to the Jiangsu Provincial Salt Bureau based on the salt reform policy of the Ministry of Industry and Information Technology.

Zhang Xiuzhong told Beijing News that as of the end of March, Hubei Lantian had nearly 500 tons of edible salt seized in Jiangsu Province, with over a hundred seizures. "All seized salt has not been returned, and economic losses exceed 2 million yuan."

On the evening of January 19, over 1,300 bags of salt in Hubei Lantian's warehouse in Changshu were seized by the local salt bureau and police.

While Hubei Lantian was worrying about its 500 tons of salt, more salt companies were also facing cross-provincial seizures.

Based on public reports and data provided by involved companies, Beijing News reporters found that since January, more than eight provinces including Jiangsu, Hubei, Guizhou, and Henan have seen seizures of out-of-province salt. A total of eight salt companies, including China Salt Shanghai, China Salt Dongxing, and Chongqing Salt Industry Group, had over 2,000 tons of goods seized by local salt departments, with some companies facing hundreds of seizures.

From January to April this year, eight salt companies had over 2,000 tons of salt seized.

Additionally, multiple salt companies reported incidents of warehouse doors being pried open for seizures and delivery trucks being fitted with GPS trackers. Seizure locations ranged from company warehouses to terminal retail points, and methods included "registration and preservation" as well as direct confiscation.

On March 14, China Salt Dongxing's delivery truck in Rugao, Nantong, was found to have a GPS tracker installed. Photo shows police taking photos for evidence. (Source: China News Service)

In the chain of cross-regional seizures, many local salt bureaus' directly affiliated enterprises, even subsidiaries of central enterprises, were detained by local salt bureaus during cross-provincial operations.

For example, the Shanghai, Dongxing, and Yulin branches of China National Salt Industry Corporation were seized 137 times by multiple departments including the Chengcheng County Salt Bureau in Shaanxi and the Xuyi County Salt Bureau in Jiangsu, totaling over 1,026 tons of salt.

Chongqing Salt Industry Group (the salt monopoly entity under the Chongqing Salt Bureau) had about 429 tons of salt seized by the Zunyi and Tongren Salt Bureaus in Guizhou and the Yichang Salt Bureau in Hubei. Hubei Lantian, also a subsidiary of the Hubei Provincial Salt Bureau, had nearly 500 tons of salt seized by the Jiangsu Provincial Salt Bureau.

Dispute: Jiangsu Lists 5 Salt Companies as Illegal Operators; Companies Claim Serious Violation of Salt Reform

On March 13, the Jiangsu Provincial Salt Administration Bureau issued the "Notice on Publishing the List of Enterprises Suspected of Illegal and Non-compliant Salt Operations in Jiangsu Province," naming China Salt Shanghai, China Salt Dongxing, China Salt Zirconium Salt Chemical, Jiuda Yingcheng, and Tangshan Tangfeng Salt as operating salt illegally in Jiangsu.

On March 17, the Wuxi Salt Administration Bureau stated that it had received a notice from higher authorities that products from five salt companies, including China Salt Dongxing and Hubei Lantian, were substandard or suspected of illegal operations.

The document stated that the listed companies would be required by the local salt administration bureau to rectify within six months, after which they could resume salt sales in Jiangsu. The document was signed by Tong Yuxiang, director of the Jiangsu Provincial Salt Administration Bureau, who also serves as chairman of Suyan Group.

Subsequently, four companies—China Salt Dongxing, China Salt Shanghai, Tangshan Tangfeng Salt, and Jiuda (Yingcheng) Salt—issued public statements claiming their operations complied with national salt reform regulations. They said the notice listing them as illegal operators seriously violated the spirit of the State Council's salt industry reform plan and that they would seek legal recourse.

Behind the official statements lies a more prominent market conflict.

Based on public reports and data from involved companies, Beijing News reporters found that as of April 6, over 1,000 tons of out-of-province salt had been seized in Jiangsu Province, with most still detained by local salt administration departments.

It is understood that the frequent salt seizures in Jiangsu have had a huge impact on many out-of-province salt companies. "The salt seizures in Jiangsu are too severe. Previously, the annual distribution plan for a general county or city was about 1,000 tons, but now we can barely complete one-tenth, maybe less than 100 tons," said a distribution manager surnamed Li at Hubei Lantian's Changshu direct sales point.

"According to incomplete statistics, since New Year's Day, our company has had salt seized 72 times in various cities and counties in Jiangsu, totaling about 700 tons," Wang Maokui, deputy general manager of China Salt Dongxing's marketing company and manager of the East China region, told Beijing News on April 5. "Now Ganyu is the most severe; all are police summons. Other out-of-province salt companies have withdrawn, leaving only our Lantian salt and local Huai salt," said Zhang Xiuzhong, deputy director of Hubei Lantian's Jiangsu direct sales office.

On April 5, Zhang Xiuzhong sent Beijing News a photo of him going to the Ganyu District Public Security Bureau to "demand the release of people," because two supermarket employees selling Lantian food products and one Hubei Lantian employee had been summoned by Ganyu police for 26 hours. Zhang said he would publicly announce a temporary withdrawal from the Ganyu market in protest.

On April 1, Beijing News called the office of the Jiangsu Provincial Salt Administration Bureau. Regarding the background and legality of the notice, a person surnamed Wang explained: "This is an internal guiding document of the provincial bureau; specific administrative penalties are carried out by municipal bureaus based on illegal facts."

Regarding the frequent salt seizures, Wang said that after the salt reform, suspected illegal operations increased, and the Jiangsu Salt Administration Bureau and public security departments jointly carried out two special enforcement actions. "This is to ensure the safety of the people's salt. Every seizure by local cities and counties has a legal basis."

However, regarding the follow-up handling of seized salt and who bears the losses, Beijing News sent an interview request to the Jiangsu Provincial Salt Administration Bureau on April 1 but had not received a reply by press time.

Contradiction: Already Obtained Cross-Provincial Operation License and Filed Records, Yet Still Repeatedly Seized

According to the "Letter No. 585 of the Ministry of Industry and Information Technology and the National Development and Reform Commission" issued in September 2016, from January 1, 2017 to December 31, 2018, as a transition period for reform, designated salt production enterprises can enter the salt circulation and sales field with salt wholesale licenses issued by their provincial salt regulatory authorities, and operate across provinces (autonomous regions, municipalities) independently.

Companies seized in Jiangsu, such as China Salt Shanghai, China Salt Dongxing, and Hubei Lantian, had all obtained local salt wholesale licenses in 2016. Notably, on March 28, the Jiangsu Provincial Salt Administration Bureau's website published the second batch of companies approved for cross-provincial operation, stating that 16 out-of-province companies, including China Salt Dongxing, could conduct cross-regional salt wholesale operations in Jiangsu after supplementing their main information to the provincial bureau.

On October 20, 2016, China Salt Shanghai obtained a salt wholesale license from the Shanghai Salt Administration Bureau, valid until December 31, 2018.

But on April 2, five days after China Salt Dongxing was approved for cross-provincial operation, the Changshu Salt Administration Bureau confiscated 80kg of refined salt from China Salt Dongxing sold by a wholesale owner in a farmers' market, citing "purchasing salt from a unit that has never obtained a salt wholesale license," and issued a handwritten simplified procedure penalty decision.

A person surnamed Wang from the Jiangsu Provincial Salt Administration Bureau office told Beijing News that the list was originally published in batches and was not a prerequisite for out-of-province salt production enterprises to operate across provinces. "If the local salt regulatory authority makes an administrative penalty decision and the enterprise disagrees, they can take legal action."

He also emphasized that although the salt industry system reform is now implemented, the salt monopoly system has not changed. According to the "Letter No. 211 of the Ministry of Industry and Information Technology and the National Development and Reform Commission," out-of-province salt enterprises have four ways to enter the local market: building their own logistics or signing distribution contracts with third-party logistics companies; building their own branches or sales outlets to directly conduct salt sales; or selling through existing channels. "Only salt entering through these four methods is qualified and standardized."

Beijing News noted that the reasons given by local salt departments for seizures mainly include "suspected illegal operations" and "purchasing from informal channels." The main basis is the 1996 "Salt Monopoly Measures," which stipulates that salt enterprises must obtain local salt wholesale licenses, and retailers must purchase salt from units with wholesale licenses.

However, with the State Council's salt reform policy, salt enterprises can operate across provinces with a salt wholesale license obtained in their own region. Therefore, salt enterprises and salt administration have different arguments, leading to conflict. "Later laws take precedence over earlier ones. Once the reform policy is issued, it should be the reference standard, and we should not stick to old regulations as the basis for enforcement," said Zou Jialai, deputy director of Shanghai Zhiping Law Firm, who has long followed salt reform. Zou said that new salt legislation still takes time, but since the salt reform policy has been issued, it should be implemented. According to the "Notice on Further Implementing the Salt Industry System Reform" issued by the National Development and Reform Commission and the Ministry of Industry and Information Technology on April 7, local laws and policies that do not conform to the salt reform plan should be cleaned up by the end of June, and before the revision of salt-related regulations is completed, relevant departments must not refuse to implement the salt reform plan.

Interests: Cross-Provincial Salt Operations Will Touch Local Interests, Reducing Profit by 1,500 Yuan per Ton

Behind the frequent salt seizures, several salt company executives told Beijing News that it is because cross-regional salt operations have touched the "cheese" of local salt companies, causing their profits to decline and sales to decrease.

A staff member of China Salt Shanghai explained that the entry of out-of-province salt inevitably has a huge impact on local salt, first reflected in the reduction of market share. "For example, previously a salt company could sell 1 million tons of salt locally in a year, but with the entry of out-of-province salt companies, it might drop to only 600,000 tons." The staff member claimed that the second impact is the reduction of profit margins. With multiple salt brands competing in one region, they will inevitably leverage their advantages and adjust prices, leading to reduced profit space for local salt companies.

The staff member also analyzed that if we take one ton of iodized salt as an example, before and after the reform, its retail price is around 4,000 yuan. However, under the previous salt monopoly model, local salt companies could earn a gross profit of about 3,000 yuan. After the reform, local salt companies' profits will decrease by 1,500 yuan, so this will inevitably affect the interests of local salt companies.

Multiple salt companies confirmed this. Zhang Xiuzhong, deputy director of Hubei Lantian's Jiangsu direct sales office, told Beijing News: "Our salt is cheaper than local salt. For example, refined salt directly to the terminal is 3,375 yuan per ton, and this price has been stable. But the local Huai salt price fluctuates greatly; currently, due to the reduction of out-of-province salt, it has risen to 4,000 yuan per ton."

Many salt company executives said that under the original salt operation system, local salt companies and local salt administration bureaus often operated as "one team, two brands," responsible for both local salt monopoly and administrative supervision. Under this interest bundling, salt administration may exercise administrative power to restrict out-of-province salt enterprises from entering the market.

Solution: Separate Government and Enterprise in Salt Operations to Avoid 'Referee Playing the Game'

"The chaos in the circulation sector during salt reform is severe, with serious conflicts between government administrative functions and market entities. The key is to separate salt enterprises from salt administration," said Hong Tao, director of the Commercial Economy Research Institute at Beijing Technology and Business University and professor of economics, to Beijing News. "If salt enterprises and salt administration are not separated, and they are both players and referees, it will cause chaos. After separating government and enterprise, each performs its own duties, and the reform process will accelerate."

A survey report by the China Salt Industry Association showed that as of June 25, 2014, among the 31 provincial-level salt regulatory agencies nationwide, 9 had separated government and enterprise, accounting for 29%. Jiangxi Province is one of the provinces that implemented separation. In 2014, its salt administration management functions were transferred to the Jiangxi Provincial Industry and Information Technology Commission, and the Jiangxi Provincial Salt Administration Bureau brand was no longer retained. The remaining 22, or 71%, were still integrated, meaning "one team, two brands, separate functions, joint office." For example, the chairman and party secretary of Jiangsu Salt Industry Group is the same person as the director of the Jiangsu Provincial Salt Administration Bureau.

Wang Qiang, inspector of the National Development and Reform Commission's Economic System Comprehensive Reform Department, recently clarified and responded to the various problems exposed during the implementation of the salt industry reform. Wang said that the NDRC has strict time requirements for separating government and enterprise: by June 30, provincial-level salt regulatory system reform plans must be completed, and by the end of 2017, the administrative functions of salt regulatory agencies or salt safety regulatory agencies must be separated from salt companies.

Before the separation is completed, how to remove the obstacles to salt reform? Liu Junhai, director of the Commercial Law Research Institute at Renmin University of China, suggested that the NDRC, as the price regulatory authority, should take responsibility when the market fails. "When the market fails, regulators cannot fail; when local governments fail, the central government cannot fail. The NDRC should conduct a comprehensive investigation into local governments that set obstacles to out-of-province salt entry and create regional barriers, and hold the main responsible persons accountable." Liu believes that salt reform is a field where reform has been severely lagging. The most important thing is to build a law-based government regulatory concept, achieve regulatory transformation, and encourage common development and fair competition.

Source: China News Service, Beijing News

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