SHANGHAI: Retail giant Wal-Mart is to appeal a decision made last month that found it guilty of fraud for mislabeling its products.

Wal-Mart East China Stores Co Ltd, which manages the corporation's operations in eastern China, was ordered by the Shanghai Pudong New Area District People's Court to pay compensation of 2,107.60 yuan ($275) to a customer surnamed Lu who filed the initial suit.

Lu said that on December 22, 2006, he purchased 10 packets of tooth powder and 10 tins of biscuits from Wal-Mart's Pudong store at a total cost of 1,187 yuan.

"Both products are imported, so they don't have Chinese wording on the original packaging," he said. "They just have simple Chinese stickers attached."

Lu said that the Chinese label on the tooth powder said it was made in Japan, but he later noticed that the information on the original package showed it was actually made in Thailand.

Also, the Chinese label on the biscuits advised customers to check the product's expiry date on the original packaging. When he did so, Lu said he found that the expiry date was October 15, 2006, which had passed.

"But by then, I had already eaten three tins of biscuits, not knowing they were out of date," he said.

Lu sued the company, demanding refunds on the 10 packets of tooth powder and the remaining cookies, as well as compensation to cover the money he initially paid, 1,187 yuan.

Under China's consumer laws, people are entitled to claim refunds as well as compensation equivalent to the amount they paid, if fraud is found to have occurred.

Wal-Mart, however, denied there were any differences between the products' Japanese and Chinese information and said Lu was not a genuine consumer. It accused him of staging the whole thing in order to claim compensation.

(China Daily 05/23/2007 page4)