Nongfu Spring was removed from the shelves of some 7-11 stores in Jiangsu： public opinion controversy is still spreading

Nongfu Spring, which is in the midst of public opinion, has attracted attention again.

On the evening of March 10, two 7-11 convenience stores in Changzhou, Jiangsu Province caused heated online discussions because they stopped selling all related products of Nongfu Spring. According to relevant news, the store did not sell Nongfu Spring and other products because the company was suspected of "flattering the sun".

Then on March 11, Jiangsu 7-11 responded that the move was the personal behavior of store employees and "does not represent the position of the company headquarters".In this regard, the reporter of Nandu Bay Finance Society learned from the operator of Jiangsu 7-11 that within the scope of the company’s regulations, franchisee stores have the autonomy to place, remove, and purchase goods.

According to the reporter of Nandu Bay Finance Society, the current behavior of Jiangsu 7-11 stores has not yet spread on a large scale, but as part of the Nongfu Spring series controversy, the company is once again on the "trend wave" of public opinion.

Operator: The listing, removal and purchase of goods are at the discretion of the franchisee "

In the removal of Nongfu Spring and its series of products, the chain convenience store 7-11 (also known as 7-ELEVEN, hereinafter collectively referred to as 7-11) has attracted much attention.

According to the reporter of Nanduwan Finance Society, in China, 7-11 stores in Chengdu are operated by Japan’s 7-11 directly controlled Qi-Shiyi (Chengdu) Co., Ltd., other regions are through concessions, seeking partners for cooperative operation, and the partners recruit franchisees locally. The two Changzhou 7-11 stores involved this time belong to the management of the operating partners in Jiangsu Province.

According to public information, the operation rights of 7-11 in Jiangsu Province are mainly responsible for Nanjing Golden Eagle Convenience Supermarket Co., Ltd., which is a subsidiary of Golden Eagle Trading Group Co., Ltd. (hereinafter referred to as Golden Eagle Trading). In November 2017, Golden Eagle Trading and Qi – Shiyi (Chengdu) Co., Ltd. signed a 20-year contract, won the concession rights of 7-11 stores in Jiangsu Province, and is responsible for the operation of franchise and other businesses.

Golden Eagle Trading won the right to operate 7-11 in Jiangsu Province in 2017. (Screenshot source: Golden Eagle Trading group company website)

From the operator’s reply, the removal of Nongfu Spring from the shelves is a "personal behavior of employees". After joining, do offline stores have the authority to remove goods from the shelves independently? Will this be constrained and managed by the operator?

In this regard, the reporter of Nandu Bay Finance Society added the WeChat of the person in charge of investment promotion of Jiangsu 7-11 in the name of consulting and joining, and the other party said in WeChat,Under the premise of getting goods from the company uniformly, the listing and removal of goods in the store are determined by the franchisee of the specific store. The other party further stated that in addition to meeting the basic matching requirements related to the shelves and the company’s new products must be put on the shelves, other goods cannot be purchased, and the (purchase) quantity and loading and unloading are carried out by the franchisee according to the actual situation.

In addition, in response to the removal of Nongfu Spring from some stores, reporters from Nandu Bay Finance Society also sent interview emails to the original investor mailbox of Golden Eagle Group (the company has been privatized) and the company mailbox, but as of press time, the other party had not replied to the relevant information.

According to public information, 7-11 originated in the United States and is currently a Japanese convenience store chain brand. In 1991, after the original owner of the 7-11 brand, American Southern Company, went bankrupt, Japan’s Ito Yokado acquired a 73% stake in the former, and the 7-11 brand was officially subsumed under Ito Yokado. In 2005, 7-11 merged with Ito Yokado and several other affiliated companies to form Seven & i Holdings.

Visit: Some 7-11s in Guangzhou still sell Nongfu Spring and other products normally

It is understood that the removal of Nongfu Spring-related products is most likely the personal behavior of franchisees, so will other 7-11 franchisees follow suit? In response, on March 11, reporters from Nandu Bay Finance Society visited a number of 711 convenience stores in Guangzhou.

During some store visits, reporters from Nandu Bay Finance Society found that Nongfu Spring’s water, beverages and other products were still on the shelves. In terms of price, the prices of Nongfu Spring-related products were the same as usual, and there was no obvious fluctuation. Among them, reporters from Nandu Bay Finance Society found in some 711 convenience stores that Nongfu Spring’s mineral water, tea and other products had different degrees of promotion activities.

In addition, the reporter of Nandu Bay Finance Society randomly asked several store assistants, who all said that they had not received the notice about the suspension of the sale of Nongfu Spring products, and did not know the situation of the suspension of the sale of Nongfu Spring and series products in some stores in Changzhou, Jiangsu.

Background: The controversy over Nongfu Spring continues

In fact, the removal of Nongfu Spring and its series of products from some 7-11 stores in Jiangsu is part of the recent Nongfu Spring controversy.

According to the reporter of Nanduwan Finance Society, when Zong Qinghou, the founder of Wahaha Group, passed away, Nongfu Spring, who was also in Hangzhou with Wahaha, and the founder Zhong Shanshan were caught in a whirlpool of public opinion. From the relationship between Zhong Shanshan and Wahaha in the past, to the dispute between natural water and pure water, to the dispute over the outer packaging of Oriental leaves, and the nationality of Zhong Shanshan’s son, the controversy surrounding Nongfu Spring on the Internet is still ongoing.

Although on March 3, Zhong Shanshan, the founder of Nongfu Spring, responded to various controversies on the Internet in a post on March 3, denying that the first pot of gold in his business came from Wahaha, and mentioning that he and Zong Qinghou shook hands and made peace after the dispute between natural water and purified water, this round of "war of words" has not subsided, and it is likely to intensify.

The reporter of Nandu Bay Finance Society noticed that in some self-media short videos, some merchants announced the removal of Nongfu Spring from the shelves in the video, and some companies recorded videos indicating that all the water used by the company was changed from Nongfu Spring to other brands. In addition, some bloggers even expressed their dissatisfaction by live streaming Nongfu Spring.

However, it is interesting that some video bloggers also "self-exposed" that someone 250,000 "let him smear Nongfu Spring", and the "black material" is packaged and sorted out, but the "capital" behind it is not clear. The reporter of Nanduwan Finance Society found that the self-exposed video has been removed from the shelves.

Under the huge public opinion controversy, Nongfu Spring was directly affected. In terms of capital markets, from March 1st to 3rd, Nongfu Spring Hong Kong stocks experienced a "three-game decline", falling from HK $44.4/share (the closing price on February 29th) to HK $41.55/share, a decline of 6.41%. Then the stock price has been hovering between HK $41 and HK $42. At the end of the afternoon on the 11th, Nongfu Spring recorded a HK $42/share increase of 1.2%. In terms of sales volume, statistics say that the sales of Nongfu Spring flagship store fell by 90% at the end of February. In addition, as of March 11th, the official flagship store of Nongfu Spring Douyin has not gone LIVE for 10 days.

Regarding the progress of relevant events, reporters from Nandu Bay Finance Society will continue to pay attention.

Nandu Bay Finance Society reporter, Beibei, Wang Jingjuan, intern, Zheng Jieting