China is considering new regulations to prohibit several practices common to retailing in most of the world. According to
Shanghai Daily:THE Ministry of Commerce is collecting suggestions for two new regulations that will place strict and clear requirements on market promotions and terms of payment among both suppliers and retailers.
Retailers will be banned from several poor practices including charging suppliers sponsorship fees for opening new stores. They will also be banned from forcing suppliers to take part in promotional activities by threatening to halt purchases.
Increasing competition and declining profit margins are given as reasons for retailers making demand on their suppliers.
A general manager, surnamed Liu, of a home appliance joint venture said the company is charged fees by retailers.
"We were charged 3,000 yuan (US$369) for each store by one chain," Liu said.
It will be interesting to see if China has any more success in enforcing these rules than the FTC has had with Robinson-Patman.
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