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« DOJ Ends Africa Sting Prosecution | Main | Beyond Balance VII: Lost Opportunities of Successor Liability »
Tuesday
Feb212012

Clampdown In China on 'Retail Fees'

Major retailers in China have been known to charge for prime positions on their shelves. Some manufacturers report having to pay an “entrance fee” or “barcode fee” before their goods would even be stocked.

Recently, the Chinese Ministry of Commerce, National Development and Reform Commission, Ministry of Public Security, State Administration of Taxation, and Administration for Industry and Commerce issued a joint statement promising to crack down on these extra fees.

Guangzhou’s National People’s Congress Representative Chen Shu announced her intention to ask the Congress to consider the fees a form of bribery under criminal law.

Sources: People’s Daily (人民日报), Yangcheng Evening News (羊城晚报)

From the China Compliance Digest (Issue No. 3: February 17, 2012).

Reader Comments (2)

I don't think we can be outraged at this one. This practice is also nearly universally common in U.S. grocery stores. They charge a "slotting fee" for new products.
http://www.ftc.gov/os/2003/11/slottingallowancerpt031114.pdf

That FTC report has many justifications for charging the slotting fee, all of which are legitimate costs and risks that retailer takes on with a new product. The question in China's retail fees is whether these "fees" are being used to offset the costs and risks, or ending up in an individual's pocket outside the the accounted for revenue stream of the retailer.
February 21, 2012 | Unregistered CommenterDoug Cornelius
Hi Doug, No disagreement with what you say. We think the significance, however, is the apparent enlargement of the definition of 'bribery' by Chinese authorities.
February 21, 2012 | Registered CommenterRichard L. Cassin

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