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Foreign Market Extortion and Regulations Considered - It's a Part of Doing Business

June 15, 2012 | Comments: 0 | Views: 243

If you do international business for any length of time eventually you get into a pickle with bribes, kick-back requests, extortion, or regulatory fines all based on and originating due to domestic competition and crony capitalism. Yes, I know it's amazing the shenanigans that go on in the US sometimes, and if you are naïve and think it doesn't happen here too with our own government regulators, lobbyists, politicians, and cut-throat competition, then I bet I can tell you who you voted for in the last presidential election, and whose bumper sticker you'll be toting around this time again. Okay so, let's talk shall we?

Even with all that goes on in the US, it's a far better cry than doing business as an American company in a foreign nation. But, rather than me just complain about the issue, let's turn this into a class show-and-tell case study for you, as I don't want anyone emailing me and telling me I don't know what I'm talking about here today.

Okay so, on June 15, 2012 their time, China Economic Review had a rather interesting article pretty much admitting the reality of the challenges that US firms have doing business in the country. The Economic Review of China indicated that the government regulators have slapped a large US retailer with another fine of over a half a million dollars and made an example of them in their media. Claiming that;

"The government agency said the retailer sold sesame oil which contained illegally high levels of benzopyrene and squid with dangerous levels of cadmium. The chemicals are carcinogens and considered harmful to human health. The allegations came as part of China's annual food safety week, when the government typically accuses foreign firms of violating regulations."

Last year, the same US Company was hit with a false-labeling pork meat scandal blown way out of proportion and it was actually a Chinese vendor that made the mistake and lied to the retailer, but the retailer got the fine and the bad press. This time it was much the same story. In this case we have less-than-ethical food processing and vendor companies selling to a large US food retailer in China, which for the most part has to buy its perishables locally, and it better buy most of its inventory in their country too.

However, those same vendors are pulling a fast one, and rather than going after them, they put all the responsibility and fines on the retailer who trusted the Chinese firms it was buying from, then the government says; "See we are enforcing food policies!" Still, this probably comes as a backlash to our own FDA now with offices in China inspecting food on its way here, much of which is turned away for various reasons similar to the chemical and carcinogen levels discussed above. Please consider all this and think on it.

Lance Winslow has launched a new provocative series of eBooks on Business Ethic Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank;

Source: EzineArticles
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