Chinese authorities confirm Carrefour price gouging

Market regulators in north China's Shanxi Province on Thursday confirmed that a Carrefour outlet in the provincial capital of Taiyuan has engaged in price gouging.

Inspectors found that the outlet had charged consumers higher prices at check-out counters, despite advertising lower prices on shelves, according to the municipal pricing bureau.

The outlet was also found to have used misleading advertising, as well as failed to provide accurate information regarding sales and allowed goods to be produced in areas that were inconsistent with the company's specifications, according to Song Jianhu, an official with the Taiyuan pricing bureau.

The investigation results have been submitted to a trial board and penalties will be issued soon, Song said.

Under Chinese regulations regarding pricing violations, regulators can seize the perpetrator's illegal profits and impose a fine no greater than five times the amount of illegally gained profit.

If there are no illegal profits, a fine of 50,000 to 500,000 yuan (7,949 to 79,491 U.S. dollars) can be imposed. A business suspension and the revocation of the perpetrator's business license are possible for grave violations.

The investigation began last week after a consumer noticed a discrepancy between the price displayed on the shelf and the price charged by the cashier.

According to company sources, when a Carrefour cashier rang up a sack of Colacao--a brand of instant powder chocolate drinks at the checkstand the consumer had bought, the price displayed at the cash register was 14.8 yuan instead of 11.90 yuan marked on the price tag. The consumer then reported the discrepancy to local pricing bureau.

The Carrefour store has issued a written statement, explaining that the incident was "an individual case" and "an unintentional mistake."

Carrefour has pledged to provide compensation of up to five times the amount of the incorrectly priced product if such incidents happen again.

Carrefour headquarters has sent a team to Taiyuan to cooperate in the investigation, said Qiao Xudong, public relations manager for Carrefour's Taiyuan branch.

Employees found to be responsible for the incident will be strictly punished, Qiao said, adding that Carrefour will conduct thorough inspections in its stores and remove management loopholes to avoid future incidents.