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February 19, 2014

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Watchdog seeks clarity on ruling meant to help disgruntled diners

SHANGHAI’S consumer rights bureau said it is seeking guidance from the country’s top market watchdog on how best to deal with restaurants that refuse to scrap corkage fees and minimum meal charges despite a recent ruling on the issue by the Supreme People’s Court.

The highest court on Friday ruled that people who have a dispute about corkage fees or minimum meal charges in VIP rooms, or are forbidden from taking their own drinks into a restaurant, can take the matter to court.

While the decision was seen as a victory for consumers, it is unlikely to result in a slew of lawsuits due to their prohibitively high costs.

Disgruntled diners can also contact the Shanghai Industrial and Commercial Administrative Bureau, or the Shanghai Consumer Rights Protection Commission (which has no right to deliver punishments but can mediate), but how those organizations should respond in light of the new ruling is unclear.

“The ruling does not specify how administrative supervisors coordinate, thus we are seeking the opinions of the State Administration for Industry and Commerce of China,” Li Tong, an official with the Shanghai Industrial and Commercial Administrative Bureau, said.

“We are waiting for a decision on whether or not restaurants can now be fined or punished for breaking the law,” he said.

In the past, without any legal basis, the bureau could act only as a mediator in disputes between restaurants and unhappy patrons, Li said.

Charges remain

Despite the Supreme Court ruling, many restaurants in Shanghai have failed to change their ways.

At the Lulu Restaurant at Plaza 66 a meal in a VIP room comes with a minimum charge of 2,500 yuan (US$412) in the evening and 1,000 yuan at lunchtime. The eatery also charges corkage of 200 yuan per bottle.

At the South Beauty Restaurant at the Super Brand Mall in Pudong, the minimum charge for VIP rooms with windows is 3,000 yuan, though there is no minimum for rooms without windows.

Other restaurants have changed their descriptions to evade the court ruling.

The Shunfeng Restaurant, for example, no longer has a minimum meal fee for its VIP rooms but does impose a minimum per capita cost on diners.

The consumer rights commission said it regularly receives complaints about corkage fees and minimum charges.

Local woman Li Xia complained after dining at the Shaoxing Xianheng Restaurant in Hongkou District. She said she was charged a corkage fee despite not being warned of it before the meal. She appealed to the commission to help her get a refund.

Another consumer, surnamed Lu, complained after he was charged a 1,200 yuan minimum fee for his party’s meal in a VIP room at the Shanghai Dafantang chain restaurant on January 14, despite being earlier told the charge would be just 800 yuan. His case has yet to be settled.

“Even with legal aid, it would be very time-consuming and costly to file a lawsuit. Without it I wouldn’t even consider it,” Lu said.

Lawyer Jin Song said he has never handled a lawsuit relating to corkage fees or minimum meal charges. It would be too costly for most people to pursue, which is why some restaurants are unconcerned about the new ruling, he said.

Tao Ailian, executive deputy secretary-general of the local consumer rights protection commission, said restaurants charge a corkage fee because when people bring in their own drinks it cuts into their profits.

Jin Peihua, deputy secretary of the Shanghai Restaurants Association, said revenue from drinks accounts for about 15 to 20 percent of a restaurant’s total sales.

The association has told restaurants to notify consumers about corkage fees and minimum charges, so it’s then up to diners what they do, he said.

Tao said she hopes the new ruling will help to promote the positive development of the restaurant trade.



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