French retailer Carrefour is under fire in Shanghai for allegedly imposing unfair charges on food suppliers.
The row has led to a suspension of some roasted seed and nut supplies at Carrefour's outlets nationwide.
Negotiations over the disputed fees broke down earlier this week between Carrefour and the Shanghai Seed and Nut Roasters Association, which represents 17 major domestic companies that supply Carrefour.
They include 11 companies, with famous brands like Taifeng, Zhenglin and A Ming, that account for about 85 per cent of total production.
If the two sides fail to resolve their differences, stocks of the roasted snacks are likely to disappear from the shelves of up to 39 Carrefour's outlets nationwide.
"It (supply suspension) is a hard decision, but we had to take it... we in fact had expected a win-win outcome,'' said Chen Enguo, secretary general of the association.
He claimed that Carrefour was insincere in its attempts to end the stand-off.
Chen accused the French company of slapping unfair fees on producers who wanted to sell their goods at Carrefour.
The charges imposed allegedly include fees for anniversary celebrations held by its distant French headquarters.
Carrefour had hit suppliers with unacceptably high fees for its display promotions during the peak sales season, according to association director Yin Wenming.
"There are nearly 20 different charges levied on us, and these charges impose heavy economic burdens -- even operational losses in some cases -- on many of us,'' said Yin, who is also chairman of Shanghai Sanming Food Co, which owns the roasted snack brand A Ming.
Carrefour said it was following the issue closely. "The truth is those fees are collected in accordance with our previous contracts with those suppliers,'' said Agnes Xia, a public relations officer with Carrefour China.
Carrefour was transparent in its handling of its contracts with suppliers. Claims that the chain had caused its suppliers economic losses were groundless, she said.
The city's industrial and commercial administration has begun an investigation into the case.
The dispute comes at a time when relationships between retailers and suppliers have become increasingly important, in the wake of China's entry to the World Trade Organization.
(China Daily June 21, 2003)
