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Carrefour, Master Kong dispute on annual price-agreement renewal

12-15-2010 14:08 BJT

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For those who love instant noodles, the French retailer may not be their first choice. Because instant noodles maker Master Kong has halted shipments of its instant noodles to Carrefour in the Chinese mainland, due to unsolved issue on the annual price-agreement renewal.

About one month ago, Master Kong raised the retail price of one package of instant noodles from 2 yuan to 2.2 yuan due to an increase in raw material prices. Carrefour rejected the 10 percent last month. Since then, Master Kong has stopped supplying the noodles to some Carrefour stores. Inside a Carrefour supermarket in Shanghai, we found instant noodles still for sale, but Master Kong's popular classic flavor was out of stock. Carrefour says the price hike will lead consumers to loose confidence in consumption, which will influence the stores' sales figures.

Instant noodles maker Master Kong has halted shipments of its instant noodles
to Carrefour in the Chinese mainland, due to unsolved issue on the annual
price-agreement renewal.

Chen Bo, Public Relations Chief of Careffour China said "What concerns us most is the stability of our prices. We must be responsible for our customers, and buying products with a high quality and lower price is what Careffour pursues."

However, Master Kong disagrees.

Person in charge of PR, Master Kong company said "We believe the dispute has nothing to do with pricing, but rather with the failed renewal of an annual agreement with Carrefour."

Insiders say the annual agreement may refer to the negotiation of sharing profits. Because Master Kong raised its retail prices, there is a possibility that Carrefour wants a greater profit from the price hike.

Zhu Lianqing, Professor of Shanghai Academy of Social Sciences said "Both the instant noodle maker and the retailer want to get a piece of the profit from the price hike."

Both parties are still addressing the issue, and working out an arrangement that puts Master Kong noodles back on store shelves.

Editor:Xiong Qu |Source: CNTV.CN

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