Carrefour fined by French court for false advertising

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Paris, French supermarket group Carrefour, the world's second-biggest retailer after Wal Mart, has been fined 1.5 million euros (2.0 million dollars) by a French court for false advertising.

The court in Evry, near Paris, ordered Carrefour to display the ruling at all the checkouts of its 213 hypermarkets in France.

"The management takes note of the decision today by the court in Evry, and is surprised by the severity of the punishment handed down. (Carrefour) reserves the right to appeal," the company said in a statement.

French consumer groups have long accused Carrefour and other retailers of misleading consumers through inaccurate advertising about low prices. At the same time, Carrefour's rivals have accused it of illegally selling below cost.

The court fined the group another 500,000 euros, taking the total to 2.0 million euros, for below-cost selling and collusion with suppliers.

While the 2 million euro fine was large, it represents a small fraction of Carrefour's profits.

Carrefour's revenue in 2006 was 77.9 billion euros ($102.32 billion), up 6.6 percent from 2005. Net profit was 2.27 billion euros ($2.98 billion). The company said it expects 2007 sales growth to be at least as strong.

At a hearing last month, the public prosecutor had called for 4.8 million euros in fines against Carrefour.

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