Cosmetics retailer Avon China's Heilongjiang Branch may face a fine of up to RMB2m as a result of a probe into "multi-level marketing," China Retail News reports.
The story, which emanates from Chinese-language media, claims that Avon (China) Heilongjiang Branch is under investigation by Harbin Municipal Department for Industry and Commerce for possible involvement in multi-level marketing.
In response, China Retail News says that Avon has asked 12 retailers "to recall outdated goods which were said to be mainly due to the company's bad business practice (luring or threatening the retailers to stock Avon products)."
China applies strict laws to direct selling, which it implemented after reopening the market after a seven-year ban to specially licensed foreign companies, including Avon, in 2005.
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