Con Cung, Vietnam’s largest baby products chain, has been using false labels to mislead its customers, authorities say.
The chain was unable to furnish invoices and other legal documents for the products, which it claimed were imported, Nguyen Trong Tin, the deputy head of HCMC’s Market Surveillance Agency, said Tuesday.
For instance, a plastic milk container it sells has a label claiming it is manufactured with German technology but fails to indicate origin, he said at a press conference on business fraud and fake and smuggled goods.
Many of the firm’s products lack legally required information on their labels, Tin said.
“These violations are enough for Con Cung to be dealt with legally.”
His agency is continuing its investigation to decide how serious the firm’s violations are.
Con Cung has come under the scanner in the last two months after a customer complained it had sold him a shirt with a label that said “Made in Thailand” but looked like it had been swapped with another label.
The company responded that the shirt was imported from Thailand, but soon afterwards took it off its shelves and offered a coupon for the value of the shirt to almost 4,000 customers who had bought it.
It had previously claimed it did not sell fakes and its labels were changed only because of “technical issues” after the manufacturer had made mistakes in them and its Thai partner company changed its own name.
It even offered a reward of VND1 billion ($43,000) to the first person who can prove that it sells fake goods.
“There is no reason for us to cheat,” its chairman, Nguyen Quoc Minh said at a press conference on Monday.
Founded in 2011, the company has 288 Con Cung and 30 ToyCity stores, mostly in Ho Chi Minh City and southern provinces.
The chain, which received funding from the Vietnamese-Japanese DAIWA-SSIAM Vietnam Growth Fund in 2017, plans to have more than 1,000 stores by 2020.
Its pre-tax profits in 2016 were VND8 billion ($350,000) on revenues of VND524 billion ($22.9 million), according to the Vietnam Industry Research and Consultancy.
HCMC’s Market Surveillance Agency busted over 88,000 cases of smuggling, business fraud and fakes in the first six months of this year and fined the offenders over VND7.4 trillion ($316 million).