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News 2007-9-30: Tesco helps 'made in China' crisis
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By Mark Kleinman, in Hong Kong

The Chinese government is rallying support from Tesco and other multinational retail groups as it tries to head off the deepening crisis over the reputation of the country's consumer products.

Tesco growth weakest since 2000

Executives from Tesco are understood to have attended a meeting in Beijing last month with officials from China's Ministry of Commerce, at which issues such as sourcing and product safety were discussed. A separate meeting the following day saw representatives from Wal-Mart, Carrefour, the French retailer, and Metro of Germany gather to discuss similar issues.

Tesco is understood to have been asked for advice relating to its sourcing practices amid signs that foreign chains operating in the world's most populous country have enjoyed a boost to sales from the "Made in China" crisis as Chinese consumers turn to reliable multinational brands.

The issue has been most pronounced in the toy industry, where Mattel, the world's biggest toy maker, has been forced to withdraw millions of toys from sale around the world in recent months. While some of the recalled products had been coated with potentially dangerous lead paint, Mattel conceded in an extraordinary public admission earlier this month that the bulk of the problems had been the result of a design flaw in many of the toys.

A string of other products emanating from China, including car tyres, seafood, pyjamas and jewellery, have also been recalled, prompting Beijing to set up a powerful government task force led by Wu Yi, the vice-premier.

Tesco is the latest British company to have been enlisted by the Chinese government in its efforts to restore the reputation of its exports juggernaut. WPP, the marketing services group headed by Sir Martin Sorrell, has also been lending support through Ogilvy Public Relations, one of its subsidiaries, which has been working with officials from the State Food & Drug Administration on its response to the crisis.

Source: telegraph.co.uk

29 Sep 2007 23:46
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