The popular hotpot chain Xiaolongkan used gutter oil as its base ingredient.

Compiled from: Beijing Daily, China Court Network
 
Yesterday, a topic about 'a Xiaolongkan store selling 2 tons of gutter oil in two years' went viral on Weibo. Since Xiaolongkan is a relatively well-known spicy hot pot brand in China and has a large audience, the outbreak of the 'Xiaolongkan gutter oil incident' has attracted significant attention from netizens, with many expressing that 'the Xiaolongkan hot pot in front of me suddenly doesn't smell good anymore'.

 
 

Case Summary
In November 2016, Su opened the 'Yulin City Yuyang District Xiaolongkan Old Hotpot Restaurant,' which officially began operations on February 24, 2017.
 
From May to July 2017, Su instructed the defendants Su Fei, Liu, and Feng to use an oil-water separator in the kitchen of the hotpot restaurant to separate waste grease from the used hotpot broth, which was then heated at high temperature and mixed with auxiliary ingredients to produce chili oil (gutter oil). The chef in charge of preparing the pots then used the processed chili oil to make hotpot broth and sold it to customers. During this period, Su Fei participated in producing 600 jin of gutter oil, while Liu and Feng participated in producing 400 jin of gutter oil, which was processed into hotpot broth and sold to customers. Liu and Feng resigned from the hotpot restaurant in June and July 20017, respectively.
 
From August 14, 2018, to April 26, 2019, Su instructed Su Fei and Su Qiang to continue using the aforementioned method to process nearly 4,000 jin of gutter oil, which was then processed into hot pot bases and sold to customers. In summary, under Su's instruction, Su Fei participated in the production and sale of 4,563 jin of gutter oil, with a total value of 80,934 yuan; Su Qiang participated in the production and sale of 3,963 jin of gutter oil, with a total value of 71,334 yuan; Liu and Feng participated in the production and sale of 400 jin of gutter oil, with a total value of 9,600 yuan.
 
 
Relevant legal provisions
"Criminal Law of the People's Republic of China"
Article 225: Crime of Illegal Business Operations
Violating national regulations, any of the following illegal business operations that disrupt market order, if the circumstances are serious, shall be punished with fixed-term imprisonment of not more than five years or criminal detention, and/or a fine of not less than one time but not more than five times the illegal gains; if the circumstances are especially serious, the punishment shall be fixed-term imprisonment of not less than five years, and a fine of not less than one time but not more than five times the illegal gains or confiscation of property: (1) Engaging in the operation of monopolized or restricted items as stipulated by laws and administrative regulations without permission; (2) Buying or selling import and export licenses, certificates of origin, or other business licenses or approval documents as stipulated by laws and administrative regulations; (3) Illegally operating securities, futures, or insurance businesses without approval from the relevant state authorities, or illegally engaging in fund payment and settlement businesses; (4) Other illegal business operations that seriously disrupt market order.
 
Article 144 Crime of Producing and Selling Toxic and Harmful Food
Whoever mixes toxic or harmful non-food raw materials into food produced or sold, or knowingly sells food mixed with such materials, shall be sentenced to up to five years in prison and fined; if it causes serious harm to human health or involves other serious circumstances, the sentence shall be five to ten years in prison and a fine; if it results in death or involves other particularly serious circumstances, the punishment shall be according to Article 141 of this law.
 
Notice from the 'Two Highs and One Department' on Severely Punishing 'Gutter Oil' Crimes
Article 2: Accurately understand the provisions of the law and strictly distinguish the boundaries of criminal conduct

 

 

(1) For those who use 'gutter oil' to produce 'edible oil,' criminal responsibility shall be pursued in accordance with the provisions of Article 144 of the Criminal Law on the crime of producing toxic or harmful food.
 
(2) If one knowingly sells "edible oil" produced using "gutter oil," they shall be held criminally responsible according to Article 144 of the Criminal Law for the crime of selling toxic or harmful food. Whether one 'knowingly' acted should be determined by comprehensively considering the suspect's or defendant's cognitive ability, the confessions and defenses of the suspect, defendant, and their co-defendants, witness testimonies, product quality, supply channels and purchase prices, sales channels, and sales prices, as well as other subjective and objective factors.
 
(3) For 'edible oil' produced using 'gutter oil', if it has already been sold and there is no physical evidence, but there is evidence proving that it was provided by an upstream supplier confirmed to have produced and sold toxic or harmful food, criminal liability shall be pursued in accordance with the provisions of Article 144 of the Criminal Law concerning the crime of selling toxic or harmful food.
 
(4) Although it is impossible to determine whether the 'edible oil' was produced or processed using 'gutter oil,' if the criminal suspects or defendants knowingly sold this 'edible oil' despite its suspicious source, they shall be dealt with according to the respective situations: if inspection detects toxic or harmful components, they shall be held criminally liable in accordance with Article 144 of the Criminal Law for selling toxic or harmful food; if it is food that does not meet safety standards, they shall be held criminally liable in accordance with Article 143 of the Criminal Law for selling food not meeting safety standards; if it involves passing off counterfeit goods as genuine, substituting inferior products for superior ones, representing non-conforming products as qualified, or infringing registered trademarks and constitutes a crime, they shall be held criminally liable in accordance with Article 140 of the Criminal Law for selling counterfeit products, or Article 213 for counterfeiting registered trademarks, or Article 214 for selling goods with counterfeit registered trademarks.
 
(5) Whoever knows or should know that someone else is committing the crimes mentioned in items (1), (2), or (3) above, and provides assistance in collecting, processing, or selling 'gutter oil', or provides loans, funds, accounts, invoices, certifications, permits, or offers technical support, production or business premises, transportation, warehousing, or storage facilitation, shall be treated as an accomplice to the crimes under items (1), (2), and (3) of this article.
 
(6) For violations of relevant regulations involving the dredging, processing, or trafficking of 'gutter oil', if there is no evidence proving it was used to produce 'edible oil', it shall be handled by the administrative authorities.
 
(7) For state employees who abuse their authority, neglect their duties, or act with favoritism in the supervision of edible oil safety and in cracking down on the illegal activities related to 'gutter oil,' if their actions constitute a crime, they shall be held criminally responsible in accordance with the relevant provisions of the Criminal Law.
 
 
[1] Court Opinion
After trial, the court held that the defendants Su, Su Fei, Su Qiang, Liu, and Feng added toxic and harmful non-food ingredients in the food they produced and sold, which violated the provisions of Article 144 of the Criminal Law of the People's Republic of China, constituting the crime of producing and selling toxic and harmful food; the facts and charges that the public prosecution agency accused the defendants Su, Su Fei, Su Qiang, Liu, and Feng of committing the crime of producing and selling toxic and harmful food are established.

The judgment is as follows:

1. The defendant Su was convicted of the crime of producing and selling toxic and harmful food, and was sentenced to two years and four months of imprisonment, and fined in RMB.170,000 yuan. (The prison term is calculated from the date the sentence is carried out. For detention prior to the execution of the sentence, each day of detention is counted as one day of the prison term, i.e., from April 27, 2019, to August 26, 2021. The fine shall be paid within three months from the second day after this judgment comes into effect.)

2. The defendant Su Moufei was convicted of the crime of producing and selling toxic and harmful food, and was sentenced to one year and six months of fixed-term imprisonment, and fined RMB.170,000 yuan. (The prison term is calculated from the date the sentence is carried out. For detention prior to the execution of the sentence, each day of detention is counted as one day of the prison term, i.e., from April 27, 2019, to October 26, 2020. The fine shall be paid within three months from the second day after this judgment comes into effect.)

3. The defendant Su was convicted of the crime of forcibly producing and selling toxic and harmful food, and was sentenced to one year and four months in prison, and fined in RMB.150,000 yuan. (The prison term is calculated from the date the sentence is carried out. For detention prior to the execution of the sentence, each day of detention is counted as one day of the prison term, i.e., from April 27, 2019, to August 26, 2020. The fine shall be paid within three months from the second day after this judgment comes into effect.)

4. The defendant Liu Dongyue, having committed the crime of producing and selling toxic and harmful food, is sentenced to one year of fixed-term imprisonment and fined in Renminbi.20,000 yuan. (The prison term is calculated from the date the sentence is carried out. For detention prior to the execution of the sentence, each day of detention is counted as one day of the prison term, i.e., from April 28, 2019, to April 27, 2020. The fine shall be paid within three months from the second day after this judgment comes into effect.)

V. The defendant Feng is convicted of the crime of producing and selling toxic and harmful food, sentenced to ten months of fixed-term imprisonment, with a suspended sentence of one year and six months, and fined in RMB.20,000 yuan. (The probation period starts from the date the judgment is finalized. The fine has been paid.)

 

 
 
[1] The author's perspective
As a well-known domestic hotpot brand, while enjoying popularity, it has failed to properly supervise and manage its franchisees, leading to the occurrence of such malicious incidents. Once the 'gutter oil incident' occurred, it not only posed a threat to the health of some customers but also brought a heavy blow to the reputation of the brand 'Xiaolongkan.' In fact, the prices of well-known chain hotpot restaurants are often not cheap, and when customers face higher prices, they inevitably have higher expectations for food quality and service. However, the occurrence of such incidents only results in greater disappointment the higher the expectations.
 
In fact, since the outbreak of the epidemic this year, the catering industry has been hit hard. In such a challenging and difficult context, the entire catering industry should further improve food safety and service quality. Operators need to manage with care, and service staff need to serve wholeheartedly in order to get through the hardships. Otherwise, not only will they be eliminated by the natural selection of the industry, but they will also face severe legal punishment.