Carrefour, Wal-Mart charged (2)

09:24, January 27, 2011      

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A 45-year-old housewife surnamed Sun, who was shopping at the same store Wednesday, said it was frustrating when she realized she had been overcharged a number of times there.

"Every time I questioned the price and was told that there's something wrong with the tags, I have to either pay the extra money or drop the items," she said.

China's consumer price index, a key gauge of inflation, rose by 3.3 percent in 2010 from a year earlier, surpassing the annual target of 3 percent, while food prices increased 7.2 percent over the same period.

The two foreign retailers, especially Carrefour, have been embroiled in disputes with suppliers and employees in China in recent years as they struggle to maintain market shares outside of their home countries.

Still, the most recent Carrefour China figures, from 2009, showed that sales at its China stores rose 16 percent year-on-year, and that it had opened 22 new stores in China that year.

However, it has lost its dominant position in China, both in the number of new stores and sales revenue, as it was accused of underpaying its employees taking a discriminatory approach to Chinese suppliers by illegally charging some additional fees.

Jiusan Oil & Fat Company, an edible soybean oil producer in Harbin, northeastern Heilongjiang Province, has stopped supplying Carrefour outlets in Harbin after the supplier was charged 18 types of entrance fees to enter the retailer's market, China Business News reported Monday.

On Friday, 6,000 employees at Carrefour's Shanghai outlets were said to have received no salary increases in the past 12 years, the National Business Daily reported.

Yu Mingyang, a professor of brand marketing at Shanghai Jiaotong University, told the Global Times that it is self-destructive for those international brands to apply double standards in China, given the fierce competition from rising domestic enterprises.

"They became spoiled in the Chinese market, as they were granted preferential policies when they first came to China, when there was little competition. But now, due to poor management, scandals involving famous foreign brands have been heard frequently, which mars their image in China," Yu said.

Yu noted that, with more mature customers and improved quality of Chinese products and services, foreign brands are losing their edge.

"The latest punishment by Chinese authorities sets a good example for building a fair playground for foreign and domestic enterprises. It rang the alarm for Carrefour and Wal-Mart that if they are unable to manage this crisis properly, they will lose ground to their Chinese competitors," he added.

Zhang Han, Zhu Shanshan and Huang Jingjing contributed to this storySource: Global Times
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