Eight high-level employees from Carrefour SA in Beijing have been detained by local police for allegedly taking bribes from suppliers.
The apprehensions are the result of an internal graft crackdown by the world's second largest retailer.
Corruption has been one of the biggest problems for foreign companies operating on the Chinese mainland.
Siemens AG said last week that it had fired 20 staffers in China last year for bribery-related offenses.
Paris-based Carrefour made the announcement of the arrest of its eight management-level employees in internal documents early this month, company officials said in Shanghai yesterday.
Carrefour called in the police to investigate 22 people, including 12 suppliers, from June 25 to August 1, according to China Business Journal.
The eight arrested employees are heads in the meat-procurement departments in seven stores in Beijing and an official with its Beijing City Commission Unit, a city-based purchasing and operating department.
Besides the arrests in Beijing, Carrefour is also undertaking corruption inquiries in the northeast region of China and Shenzhen in southern China's Guangdong Province, according to Beijing Youth Daily.
Pei Liang, secretary general of the China Chain Store & Franchise Association, told Shanghai Daily yesterday that corruption problems can be solved by streamlining and centralizing purchasing practices.
Carrefour is certainly following this line of thinking. This year the company has set up city commission units in four areas to replace local stores with the responsibility of purchasing, pricing and promotion negotiations with suppliers.
Carrefour boosted its China sales 53 percent to 24.8 billion yuan (US$3.3 billion) for last year.
Purchasing scandals are not confined to the Chinese mainland. Five employees of the Inner Mongolia Little Sheep Catering Chain Co Ltd have been detained for allegedly taking bribes from suppliers in Hong Kong.
The nation's largest hotpot restaurant chain said three employees - a regional manager of Little Sheep's Hong Kong subsidiary and two former employees - are under investigation by the Hong Kong Independent Commission Against Corruption.
(Shanghai Daily August 27, 2007)