Joint efforts to rectify illegal collection of charges by big retailers from suppliers

On January 10th of 2012, Ministry of Commerce, National Development and Reform Commission, Ministry of Public Security, State Administration of Taxation and State Administration for Industry and Commerce held jointly a video conference to arrange work concerning rectification of retailers’ illegal collection charges from suppliers. Vice Minister of Commerce Jiang Zengwei, Vice Director of NDRC Peng Sen and Vice Director of SAIC Zhong Youping attended and addressed the conference.

Approved by the State Council, the above departments jointly printed and distributed Program on Retailers’ Illegal Collection of Charges from Suppliers. The Conference is a further mobilization and arrangement nationwide, so as to ensure the practical result of the work and to promote fair trade.

According to Mr. Jiang, the work can help reduce cost in circulation, curb preposterous prices, increase residents’ consumption capacity, improve consumption environment and boost consumption. It can also prevent suppliers from reducing quality through lowering cost, so as to safeguard consumers’ benefits; it can help promote the honest operation of retailers and suppliers, and advance credit building in commercial field.

Targets at this time are big retailers and their affiliated stores such as supermarkets, department store and home appliance chains which collect illegally charges from suppliers by taking advantage of predominance in market. The criteria for big retailers are: area of single business shop over 6,000 square meters, more than 20 outlets across the nation, and annual revenue of more than 2 billion yuan ($316.17 million) in 2010. Other retail enterprises reported by suppliers for illegal collection of charge can be put under rectification by related provincial departments and submitted to the State Council.

Mr. Jiang pointed out that this work should be done according to law. Mr. Jiang stressed it should have focus on regulating promotional service fees, forbidding illegal collection of charges, and pricing clearly. The illegal collection of charges include contract fees, cartage, distribution fees, festival celebration fees, shop anniversary fees, shop opening fees, fees of checking sales or account closing information, card swiping fees, bar code fees (fees for new arrivals), fees for new suppliers’ entry and unconditional rebates, all of which are charged by retailers to suppliers with their market advantages.

Mr. Peng arranged work concerning supervising market price, regulating operators’ pricing, punishing pricing violations and monopoly pricing according to law, and rectifying infringement of clear pricing. Mr. Zhong brought up work requirements about investigating and punishing commercial bribery and un-fair competition in promotional activities, and cracking down illegal charges by big retailers with their market advantages. China Chain Store & Franchise Association put forward Proposal on Fair Transaction between Retailers and Suppliers at the conference.

Source: Ministry of Commerce Website; http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/201201/20120107924830.html

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