Carrefour, Wal-Mart face fines over prices

08:25, January 27, 2011      

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Retail giants Carrefour and Wal-Mart are facing fines of up to 500,000 yuan (US$75,954) for overpricing and cheating, according to China's top economic planner.

The National Development and Reform Commission said yesterday that an investigation had found some Carrefour and Wal-Mart outlets in China were "cheating" customers with bogus prices or misleading tags but charging a higher amount at the check-out.

An investigation into supermarket prices was launched after complaints from customers.

The commission said the practices uncovered were violations of China's laws and hurt consumers' interests.

It said price frauds were reported in more than 10 Carrefour and Wal-Mart shops nationwide, including branches in Shanghai, Changchun, Shenyang and Kunming, and covered a wide range of products from clothes and homeware to food.

During the investigation, a 338-gram pack of sunflower seeds was sold at 6.9 yuan in a Carrefour Lianyang store in Shanghai, discounted from 14.80 yuan.

But the actual original price should have been 7.4 yuan.

In a Wal-Mart Beicheng Tianjie Store in Chongqing, one kind of Tie Guanyin tea was priced at 29 yuan but customers were asked to pay 39.8 yuan when they reached the check-out.

Zhao Jiaoli, secretary general of the Shanghai Commission of Consumers' Rights and Interests Protection, said complaints about pricing increased during year-end promotions.

"The major reason is that consumers have difficulties in acquiring real price information from sellers," said Zhao. "All the retailers need to be honest when they launch promotions."

Carrefour China apologized for any pricing irregularities and said the company would establish a special control group to conduct internal price quality inspections.

Source: Shanghai Daily

The company pledged to refund five times any difference between price tag and check-out price.

Wal-Mart also issued a statement saying it would strengthen efforts on price inspections and treat any problems extremely seriously.

Carrefour was the biggest foreign chain operator in China and ranked seventh among China's top 100 franchise retailers in 2009, according to the China Chain Store and Franchise Association. Its 2009 revenue totaled 36.6 billion yuan with 156 outlets nationwide.

Wal-Mart was ninth in 2009's top 100 list with 34 billion yuan in revenue from 175 stores in China.
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