In the news: Starbucks under attack, GSK's sales fall and Wumart acquisition
October 25, 2013 | BY
clpstaff &clp articlesA CCTV attack against Starbucks has failed, while GSK's sales declined 61% because of the anti-corruption investigation and retailer Wumart takes a minority stake in a Thai supermarket chain
Starbucks expensive – who cares?
The official China Central Television (CCTV) released a global investigative report into how Starbucks charges higher prices in China than it does in other markets. The 23-minute segment formed part of its hour-long news programme on Sunday. CCTV claimed that the price of a tall latte in Beijing is Rmb27 ($4.43), compared to $4.00 in London, $3.26 in Chicago and $2.40 in Mumbai. The government-controlled broadcaster said Starbucks set prices higher in China than in other markets, which discriminated against Chinese consumers.
Source: BBC
Analysis: Bloomberg
Starbucks has become CCTV's next target as the broadcaster asserts its power to assist in China's crackdown on pricing. Previous and successful targets include Apple and Volkswagen, but CCTV did not expect the reaction of 40 million Weibo users to be against the TV station. Users were angry at CCTV for focusing on such a trivial matter, instead of considering issues like air pollution. CCTV clearly picked the wrong target this time and its reputation will suffer. This could be good news for foreign brand owners if a similar reaction occurs after another CCTV report.
More from CLP:
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now