Measures for Administration of Fair Trading for Retailers and Suppliers Energetically Promoting the Harmonious Commercial Environment

                                                                 Susan Sun

To maintain fair and just market transaction order, the 5 Ministries (Ministry of Commerce, National Development and Reform Commission, Ministry of Public Security, State Taxation Administration and State Administration for Industry and Commerce jointly released Measures for Administration of Fair Trading for Retailers and Suppliers (abbreviated in Measures below). It will be put in force starting from Nov.15, 2006.

In recent years, in retail industry some retailers taking advantages of their positive market presence in respect of sales channels to force suppliers to accept unfair contract provisions, charge fees of all kinds, or delay and refuse to pay back the arrears for a long period of time, seriously damaging the trade order of the market and destroying the market environment of fair transaction. It has gone beyond the judicial category of Law of Contract and it is no longer the ordinary civil and commercial behaviors but belonging to the public law category of Law of Fair Transaction. It wants intervening of the government. Therefore, Measures aim at the maintenance of fair transaction order, regulation of abuse of the positive market presence and construction of harmonious social environment.

Measures consists of 26 articles in all, most of which restrict the abuse of positivemarket presence by retailers while only one of which restricts suppliers. Measures restrict the behaviors of retailers mainly in the following aspects:

（1）Regulate retailers not to abuse their positive market presence for purposes of 5 kinds unfair transactions, including forcing suppliers to burden the damage and loss of commodities, sales with kickbacks, refusal of commodity acceptance with no proper reasons, commodities off the counter or counters removal, and so on.

（2）Regulate retailers not to carry on activities which interfere with fair competition, including restriction on pricing fixing of suppliers and its commodity provision for other retailers.

（3）Regulate retailers not to require suppliers irrationally to return commodities in 3 conditions, such as replenishment of the stock at low prices during the promotion period and return of the rest at normal prices after the promotion period.

（4）Regulate retailers in detail of the conditions and procedures of service charge from suppliers, with a must to have the agreement of suppliers in advance and contract making, and of the clear arrangement of items, contents and terms of service provided, and item, standard, amount and usage charged.

（5）Regulate retailers not to charge or charge in disguised forms 6 kinds of expenses, including that charged by contract assignment, that of bar code beyond cost, that of store decoration, that of promotion charged on the ground of holidays and anniversaries, and that of others with no direct relationship with commodity sales. This article will strictly restrict retailers taking advantages of their positive market presence to transfer to suppliers the operation costs which should have been borne by themselves.

（6）Clearly regulate retailers to pay to suppliers no longer than 60 days after receiving commodities and restrict several kinds of irrational reasons of retailers’ delay in payment.

Apartment from main regulations on behaviors of retailers, Measures as well regulate suppliers not to require retailers to offer joint commodities or restrict retailers to sell commodities of other suppliers.

In all, Measures has constructed a relatively complete regulation of fair transaction, the implementation of which benefits the construction of fair and just retail relationship, the maintenance of legal rights and interests of retailers, suppliers and customers, the promotion of healthy and orderly development of retail industry and the construction of harmonious commercial environment.