Market regulator’s excessive fine backfires

Disproportional punishment said to have overlooked supervision, persuasion

Experts have called for standardized law enforcement following news that a small grocery store in Yulin, Shaanxi province, was fined 66,000 yuan ($9,600) by local authorities for selling 2.5 kilograms of substandard celery worth 20 yuan.

The case has resulted in a widespread backlash and ridicule on social media. It became one of the trending topics on Sina Weibo on Sunday and has been viewed more than 200 million times, with netizens lamenting that the punishment was too harsh and unreasonable.

According to a report by China Central Television over the weekend, a small grocery store bought 3.5 kg of celery from a wholesale market which it then put on sale. When the market regulator visited the shop, it took 1 kg for inspection.

A month later, the shop received a report from the regulator saying the celery was not up to standards. During that time, the remaining 2.5 kilograms had been sold to customers for 20 yuan.

According to the Food Safety Law, a producer or seller of food priced at less than 10,000 yuan and that contains harmful materials or additives can be fined between 50,000 and 100,000 yuan.

Local authorities decided to fine the shop 66,000 yuan. The shop was unable to provide the receipt from the wholesaler and could not prove where it had bought the celery from.

The case is being looked into by an inspection team sent by the State Council, China's Cabinet.

It has dispatched 19 inspection teams across the country to rectify problems in auditing and supervision work related to food and energy security.

Chen Xiao, an inspector on the team, said law enforcement authorities should not only focus on the letter of the law.

While ensuring order, market regulation authorities should also create a favorable business environment for market entities and small and micro businesses, he said.

The inspectors found that 21 of more than 50 cases involving small and micro businesses had resulted in fines of more than 50,000 yuan from the Yulin administration for market regulation last year, yet the cases only involved small amounts of up to several hundred yuan.

Yan Yandong, deputy director of the Yulin administration for market regulation, admitted that the punishments were too harsh and the administration will instead focus on educating and censuring violators to ensure they comply with laws and regulations.

Wang Qingbin, a law professor and director of the Food and Drug Law Research Center at the China University of Political Science and Law, said that the current Food Safety Law amendment, which came into effect in 2015, had raised the fines for food safety violations considerably to prevent incidents.

In practice, the law has given local authorities too much room to decide the appropriate punishment for individual cases, he said.

As a result, in cases that do not cause much harm and involve little money, some local authorities decide to levy no fines, while others impose heavy fines citing the law, he said, adding that they have overlooked the Administration Penalty Law amendment that came into effect last year, which stipulates that first-time offenders with little impact can be exempt from administrative penalty.

Wang added that the Food Safety Law requires revision to conform to difficulties in implementation.

Liu Junhai, a law professor at Renmin University of China, said the revised Administration Penalty Law underscores the principle of combining penalties with education, and imposing administrative penalties based on facts and the social impact of incidents.

Some local authorities have paid too much attention to punishment, while overlooking supervision and persuasion before handing out fines, he said.

Impacted by COVID-19, market entities need more support from the government, and handing out fines won't promote stable economic development or employment, Liu said.

"The purpose of law enforcement and supervision is to promote development and build a stable, fair and transparent business environment," he said. "Authorities should promote the development of the rights of individuals and the competitiveness of enterprises."

Cao Yin contributed to this story.