Retailer faces new blame

Global Times | November 02, 2011 23:47   （环球时报）
By Yu Xi

Wal-Mart refuted Wednesday a report that the company refused to pay its rent for nearly 10 years to Wanguo Shopping Plaza in Dalian, Liaoning Province.

According to a report by CCTV last week, Wanguo Shopping Plaza granted capital and land to establish a Wal-Mart branch in Dalian, at a yearly rental fee of 10 million yuan ($1.6 million) over a 15-year period starting from 2002, but Wal-Mart didn't pay any rent ever since 2002.

Wal-Mart responded Wednesday that it terminated the contract with Wanguo in 2007 because Wanguo could not meet construction conditions and delayed the time to finish the whole project, which caused the company a loss of about 61 million yuan, according to a  statement sent to the Global Times Wednesday.

The International Economic and Trade Arbitration Commission rejected the request of Wanguo to order Wal-Mart to pay compensation for the rent, according to the statement.

The Dalian Intermediate People's Court conducted a hearing in August and adjourned the case because Wal-Mart could not tell who was in charge of the contract at that time, CCTV reported. "Court records show the case was last heard in 2006," a staff member at the Dalian Intermediate People's Court told the Global Times Monday.

"Obviously, Wal-Mart has not been active in dealing with the incident and it shows its lack of 'ethical sense' in China, as the company is adopting two different standards for its domestic and overseas business," a retail analyst at CIC Industry Research Center told the Global Times Wednesday.

He said many foreign companies like Wal-Mart have not fully adapted to the Chinese market and they are facing difficulties in increasing their profits in China.

The world's No. 1 retailer by sales has faced a number of troubles in China recently. Its 13 stores in Chongqing were ordered to be closed for 15 days because the company fraudulently sold ordinary pork by labeling it as more expensive organic pork. After the pork scandal, Wal-Mart said its China chief executive resigned for personal reasons last month.

"Wal-Mart is just like a spoiled child that Chinese authorities or the ordinary people treasure too much," Wang Xianqing, director of the Institute of Economics of the Guangdong University of Business Studies, told the Global Times Wednesday.

According to Wang, foreign companies need to increase their competitiveness instead of relying on preferential treatment. Wang said it is time for authorities and common people to regard foreign companies in "a reasonable way," not "adore them blindly."

Chinese companies also need to pay attention to their performance in other countries. Their public image is important and helpful in creating a good impression among consumers, according to Wang.

http://www.globaltimes.cn/NEWS/tabid/99/ID/682227/Retailer-faces-new-blame.aspx