Luckin Coffee fined by Chinese authorities for unfair competition

Source: Global Times Published: 2020/9/22 16:13:40

Photo shows a Luckin Coffee shop in Shanghai, east China. Photo: Xinhua

Luckin Coffee announced on Tuesday that it will accept the penalty imposed by Chinese market regulatory authorities and will rectify its behavior in accordance with the law after it was fined for unfair competition.

The announcement came after the Chinese coffee chain, together with 43 relevant third-party companies, was fined 61 million yuan ($8.9million) by the Chinese State Administration for Market Regulation on Friday after it was caught carrying out false advertising from August 2019 to April 2020.

According to the investigation, Luckin Coffee had falsely inflated its 2019 sales revenue, costs, and the profit margins of various products with the help of a number of third-party companies between April 2019 and December 2019, in order to obtain a competitive advantage.

From August 2019 to April 2020, Luckin Coffee was found to have used false marketing data in its promotional campaigns which violated the Anti-Unfair Competition Law, the investigation found.

"Luckin Coffee will further regulate business activities in accordance with laws and regulations to ensure stable operations," wrote Luckin in the statement.

The Chinese domestic rival to Starbucks was delisted in June on NASDAQ after a serious financial scandal


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