Business Intelligence on Retailing, Franchising, and Consumerism in China

Chinese Agencies Try Improving Retailer, Supplier Relations

China's Ministry of Commerce, National Reform and Development Commission, Ministry of Public Security, State Administration of Taxation and State Administration of Industry and Commerce have jointly issued a new regulation to help regulate and improve the relations among retailers and suppliers.

The new regulation, which is called "Management Measures on the Fair Transaction between Retailers and Suppliers", stipulates that retailers must not abuse their own advantage to cause unfair competition, and they must not collect any fee for sales promotions without suppliers' consent.

The new also requires that the suppliers and retailers define the payment terms in their contracts and the term must not be more than 60 days. The regulation says that retailers shall be fined up to RMB30000 for any violation.

Before this regulation came out, some retailers charged high fees from suppliers who wanted to have their products sold at the retailers' stores. This regulation is expected to bring an end to this unfair behavior.

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