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Media firm sues supermarket over in-store ads

A MEDIA advertising company is suing a supermarket chain for 48 million yuan (US$7 million) for breach of contract.

Shanghai Focus Defeng Advertising Co Ltd told a court yesterday that it had exclusive rights to install TV sets and broadcast ads in Rt-Mart outlets but said the chain had allowed others to broadcast ads in its stores.

Focus Defeng asked the Shanghai No. 2 Intermediate People's Court to order the supermarket to return a 20 million yuan deposit plus rent totaling 20 million yuan.

The two sides signed a five-year contract in 2007 entitling Focus Defeng to install TV sets in 74 Rt-Mart outlets on China's mainland, nine of which are in Shanghai, and broadcast ads. The yearly rent for each outlet was 600,000 yuan.

Six more outlets were added to the contract last May.

But there was a dispute over the contract terms in the middle of last year. Focus Defeng said suppliers had installed TV sets to promote their products and Rt-Mart had cut off power to Focus Defeng's sets.

"As a result, the supermarket suppliers wouldn't pay us to show their ads and we have suffered huge economic losses," said the media company's lawyer, Shen Yun. "We paid a high rent in order to get exclusive rights."

Rt-Mart denied it had cut off power to Focus Defeng's TV sets. It said the electricity supply had only been cut by the power company a few times during peak summer hours.

The TV sets complained about were installed before a contract was signed and served to introduce the function of some products only for short periods, Rt-Mart said.

The court didn't announce a verdict yesterday.


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