China to end centuries-old state monopoly on salt to spur competition

SHANGHAI (Reuters) - China is to end a monopoly over the production and sale of table salt, its official broadcaster said on Thursday, dismantling a system that has been in place in various guises for more than two thousand years and run by a state monopoly since 1950.

The move reflects Beijing's drive to deregulate state-run sectors to encourage greater competition among firms and tackle inefficiencies in the market. "The overall direction of reform for the salt industry will be to reduce the role of government in business operations and to end the monopoly on edible salt," China Central Television (CCTV) said, citing the Ministry of Industry and Information Technology.

The disbanding of the salt monopoly will start in 2016 and should be complete by 2017, CCTV said.

China is the world's biggest consumer of salt, including that used in the chemical industry, according to mineral consultancy Roskill Information Services. With its population of nearly 1.4 billion, it accounted for nearly a quarter of global demand in 2012.

The size of the Chinese market has attracted firms such as US brand Morton Salt, which expanded its operations in China earlier this year. Morton works with a Chinese partner that is part of the salt monopoly.

CCTV did not make clear whether foreign firms would be able to operate independently after the monopoly was lifted.

However, it said distributors would be allowed to operate across different regions. "This will liberate salt prices, open up the wholesale trade of edible salt and the distribution market," it said.

According to some academics, China's salt monopoly dates back to around the seventh century BC and has existed, with small gaps, ever since.

It is currently overseen by China National Salt Industry Corporation, which says it ensures the country has stable supplies and that salt is iodised, a measure that protects against certain diseases.

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