Carrefour tangled up in instant noodle dispute

13:04, December 14, 2010      

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Food and beverage maker Tingyi Holdings halted shipments of its popular Master Kong noodles to French retailer Carrefour stores in the Chinesemainland Monday, due to unsolved issues on the annual price-agreement renewal.

Master Kong's holding company, Taiwan-based Tingyi Holdings Corp, told the Hong Kong Stock Exchange in October that it was raising the retail price of each package of instant noodles from 2 yuan ($0.30) to 2.20 yuan ($0.33) due to an increase in raw material prices.

But apparently Carrefour was unhappy with the 10 percent price hike and rejected it last month, local media reported.

As a result, Master Kong stopped supplying the noodles to some Carrefour stores in Hebei Province and Chongqing Municipality, according to the Chineselanguage Chongqing Evening News.

"We placed our orders (for the original price) as usual but got no product deliveries," a staff member surnamed Feng in the grocery department at Beijing's Ciyunsi Carrefour store, told the Global Times. The store is now out of the popular brand of instant noodles, and Feng added that the last time that they got a delivery was November 20.

Phone calls to other retailers in Beijing such as Wal-Mart and local Jingkelong supermarkets revealed that not everyone had run out of supplies.

Chen Bo, public relation director for Carrefour China, told the Global Times via e-mail that "Under the current inflation, and out of consideration (of efforts) to stabilize (retail) prices, Carrefour has temporarily disagreed with the price adjustment (from Master Kong), and therefore the product is out of stock" in those stores.

But he added that both parties are addressing the issue, trying to work out an arrangement that puts Master Kong noodles back on store shelves.

However, Chen Kungju, spokesman of parent company Ting Hsin International, said the disagreement has nothing to do with pricing, but rather with the failed renewal of an annual agreement with Carrefour.

"Master Kong is not the only brand that has raised prices. Carrefour didn't object to others, so why object to Master Kong?" he said.

Source: Global Times
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