Health foods litigation in China: Unregulated influencer marketing and fake goods spur nearly 1000 actions

Examples of the cases included general foods making health and therapeutic claims by influencer marketing, as well as illegal production of fake supplements using ingredients imported from the US.

Persons involved have since been charged and prosecuted under criminal law. Certain cases also involved civil lawsuits.  

The country’s Supreme People’s Procuratorate (SPP) said that the cases were brought to light between September 2019 and December last year, when it worked with the State Administration for Market Regulation (SAMR) and National Medical Products Administration (NMPA) in a crackdown against food and medicine safety issues.

A total of 7,569 litigation cases have been raised, of which, 4,718 involved agricultural products and 1,887 involved food products sold on the internet, while 964 involved health foods.

“There were cases on fake advertising of health foods, as well as the sale of food products with counterfeit trademark. ​

“There were also cases involving compensation 10 times higher against manufacturers and sellers of poisonous and harmful food, as well as those that called for compensation three times the amount involved in cases of fake advertising where consumers were deceived,”​ said Xu Quanbin, a senior SPP prosecutor during a media conference.

“By demanding compensation from the people who have infringed the law as a form of punishment, [we can] protect consumers’ legal rights, raise the stakes of illegal activities, at the same time, warn and deter potential infringers,”​ he added.

Case study 1: Unregulated influencer-marketing ​

Out of the eight case studies that the SPP has highlighted, one of it raised the issue of unregulated sale of general foods marketed as health foods online via influencer-marketing and/or livestreaming sessions. 

In these instances, the products did not provide the required information, such as the ingredient list, production dates, name of manufacturer, address, contacts.

To prevent leaving online transaction records and monitoring from the authorities, the merchants/influencers will leave their Wechat contact or other contact methods to get in touch with the buyers so that the transaction could take place offline.

Handled by the Beijing Railway Transport Court, the cases were brought to the attention of Beijing’s market regulator, which in turn conduct an investigation on the platforms in which those merchants/influencers have promoted their products.

These platforms were also asked to step up checks on content posted.

Case study 2: Fake goods ​

In another case, a biotech company in Changzhou, Jiangsu, had manufactured a fake supplement product using magnesium chloride imported from the US, but marketed it as a product that contains 81 minerals and micronutrients beneficial for respiratory, heart, and digestive health.

Over 80k bottles were sold, which is equivalent to total sales of RMB$23m (US$3m).

The company, which is in the business of distributing and selling health foods, also did not have the required license to make health foods.

The fake supplement did not contain the required information such as its SC (sheng chan, meaning production) number.

The company even conducted health lessons to promote the product.

The Jiangsu Changzhou Intermediate People’s Court handled a civil lawsuit against the company raised by the Changzhou city People’s Procuratorate.  

The procuratorate had demanded for a compensation three times the amount the company had gained via sales of the product.