On October 12, 2020, The State Administration for Market Regulation (SAMR) has published the decision letter on the administrative penalties on Luckin Coffee (China) Co., LTD for unfair competition violations.

From April to December 2019, in order to obtain competitive advantages and trading opportunities, the company falsely increased Luckin Coffee's key marketing indicators such as sales revenue, costs, and profit margins of related products in 2019 with the help of many companies.

According to statistics, the company has made a total of 123 million fake coffee orders with the help of a number of third-party companies. At the same time, the company carried out false transactions with a number of third-party companies, inflated costs and expenses through fictitious raw material procurement, takeaway delivery business, inflating labor outsourcing business, fictitious advertising business, etc., to balance performance and profit data. Through the continuous circulation of funds, a substantial increase in operating income has been realized, and finally an extremely attractive false performance was formed to deceive and misleaded consumers and the relevant public.

According to the "People's Republic of China Anti-Unfair Competition Law", SAMR decided to impose a fine of RMB 2 million on the company as an administrative penalty on September 18, 2020.

---

Business Division of Food Safety and Regulatory Compliance of Global Foodmate provides food standards & regulations research, labelling compliance consulting/Chinese label design, industry public opinion monitoring and analysis, registration services (of Infant formula, FSMP, Health food, Novel Food Ingredients, Novel Food Additives, New Varieties of Food-Related Products and Overseas manufacturers of imported food) and other comprehensive food safety solutions for domestic and overseas enterprises and institutions in food industry. 

Please feel free to contact us: +86 10 68869850, E-mail: global_info@foodmate.net