At Taiwan's Taipei Leechi, a famed pastry and souvenir shop usually packed with eager shoppers, angry customers pounded the counter this week as the government vowed to do more to protect food safety.

Leechi is among hundreds of Taiwanese bakeries and eateries that were found last week to have sold desserts and dishes made with substandard cooking oil. Most of them say they didn't know their Kaohsiung-based supplier, Chang Guann Co., might have adulterated lard oil with restaurant and slaughterhouse waste.

"It would be difficult to regain our reputation," said a senior pastry chef at Leechi, who helped store clerks to deal with refunds from angry customers. The shop declined to estimate its losses from the oil scandal.

At a televised press conference Thursday, Chang Guann's chairman Yeh Wen-hsiang knelt in front of cameras, saying tearfully that his company is also a victim and was misled by its own suppliers in the production process.

Since the scandal broke last Monday, it's continued to spread beyond Taiwan. Maxim's, a major restaurant chain in Hong Kong that also operates Starbucks coffee shops there, recalled their pineapple buns, which were made with lard oil supplied by Chang Guann. In Taiwan, more than 200 tons of tainted lard oil and lard oil-laced products—mostly pastries and processed food—were removed from store shelves and menus over the past week.

Adding anxieties to the scandal is the fact that some of those tainted products sold had been certified as safe. Now, as the lard-oil scandal continues to roil Taiwan, more are demanding an overhaul of the food safety system.

In Taiwan, laboratory tests of food and ad hoc investigations of factory conditions are carried out by the government's industrial development bureau and its outsourced labs. Such test results are then sent to the Taiwan Food Good Manufacturing Practice Development Association, an industry body, which in turn issues a certificate of quality.

"We need to do more to improve the certification process and regain public trust," said Bonnie Sun Pan, the head of the association.

Premier Jiang Yi-huah said Thursday that he is reviewing whether the system, which has been around for 25 years, should be abolished or enhanced, for example by including more consumer-protection representatives or increasing ad hoc checks of factories.

Ms. Sun says the association is also considering tightening the criteria for its certifications. Currently, a quality certificate can be issued even when only one out a particular manufacturer's products passes relevant tests. In future, the certification may require a pass on all products, Ms. Sun said.

It won't be easy: Ms. Sun says that the government's 500 food safety workers are already stretched thin trying to regulate a food and beverage industry consisting of 300,000 manufacturers.

Scholars say that the responsibility of ensuring food safety shouldn't rest so much in the hands of industry.

"The government should take over full responsibility now, by establishing an effective mechanism to closely monitor food safety issues," said Kuen-yuh Wu, a professor at College of Public Health at National Taiwan University.

This isn't the first time food safety fears have swept Taiwan. Last year, Taiwan's food and beverage industry was also hit with reputational damage after several companies were found adulterating cooking oil with illegal coloring agents and cheaper cottonseed oil. The scandal prompted the U.S. and Singapore to remove all Taiwanese foods tainted by the chemicals.

Meanwhile in 2011, some companies were also found to be illegally using plasticizer to replace palm oil as a clouding agent in bottled drinks. A subsequent widespread recall of drinks from nearly 40,000 retailers in Taiwan was a huge blow to the island's reputation as a reliable food manufacturing hub in the Greater China region, analysts say.

--Fanny Liu with contributions from Aries Poon

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