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China Denies Report of Forced Labor Over Tesco Christmas Cards

Tesco Suspends Chinese Card Maker After Forced Labor Allegations

(Bloomberg) -- U.K. retailer Tesco Plc’s suspension of a Chinese supplier over allegations that it used prison labor prompted an angry back-and-forth between China’s government and the former journalist who raised the concerns.

Foreign Ministry spokesman Geng Shuang denied that foreign prisoners in a Shanghai facility are forced to work, calling the allegations “a drama choreographed by” a former inmate. The comments, at a Monday press briefing, came after Tesco halted its supply of Christmas cards from a Chinese factory and said it was investigating a newspaper report that forced labor was used in their production.

The Sunday Times reported earlier that a 6-year-old girl from London discovered a note in her Tesco Christmas cards that read: “We are foreign prisoners in Shanghai Qingpu Prison China. Forced to work against our will. Please help us and notify human rights organization.”

The author of the Sunday Times article, Peter Humphrey, stood by his story, saying in an interview with Bloomberg that “it was to be expected that they would lie.” Humphrey was previously imprisoned in the same facility on what he calls bogus charges that were probably triggered by his work in China as a corporate fraud investigator.

“There’s nothing companies can do to prevent this from happening, aside from not ordering or producing in China at all,” Humphrey said.

All the cards produced by the factory have been withdrawn from sale, Tesco said in a statement on Sunday. If the investigation shows a breach of the company’s rule against using prison labor, then the factory will be removed from Tesco’s supplier list “immediately and permanently.”

China Denies Report of Forced Labor Over Tesco Christmas Cards

Such notes have been discovered in products sold by brands like Walmart Inc. and Saks Inc. in the past decade as western companies’ reliance on Chinese production has meant exposure to chains of sub-contractors that reportedly make use of prison labor. Low-cost sourcing in China has been a double-edged sword for companies caught up in questions over the provenance of the goods they sell.

While paying inmates to work is not prohibited under International Labor Organization guidelines, most international companies say they avoid prison labor because it is often difficult to ascertain whether people were forced to work.

Tesco said that its Chinese supplier, Zhejiang Yunguang Printing Co., was independently audited as recently as last month and there was no evidence that rules had been broken. “We abhor the use of prison labor and would never allow it in our supply chain,” the company said.

‘Ridiculous, Slander’

A representative for Zhejiang Yunguang said by phone on Monday that the report was “ridiculous and a slander.”

“Someone may be wanting to defame our factory and our country,” said the representative, who declined to give his name.

Calls to Shanghai Qingpu prison were not answered.

Tesco donates the money raised from such Christmas cards to the British Heart Foundation, Cancer Research U.K. and Diabetes U.K.

“Like Tesco, we’re shocked by these allegations,” the charities said in an e-mailed statement Monday. “We are in touch with Tesco, who have assured us that these particular cards have been removed from sale, and that the factory producing them has been suspended while they investigate further. We await the outcome of Tesco’s full investigation.”

Tesco shares were little changed Monday in London.

The note, written inside a card featuring a cat in a Santa hat on the front, asked whoever found it to contact Humphrey. The girl’s father researched the name online and contacted Humphrey, who then wrote the story for the Times.

‘Mum, Look’

The father, Ben Widdicombe, told the BBC in an interview that his daughter laughed when she first saw the note. The girl had been writing Christmas cards and told her mother, “Oh, Mum, look -- someone’s already written in this card, isn’t that funny,” Widdicombe said. “On reflection, we realized it was potentially quite a serious thing.”

Forced labor in China is an enduring human rights issue that has plagued Western brands since the country became the factory to the world in the 1990s. The issue has received renewed global attention after reports that upwards of 1 million Uighurs, a Muslim ethnic group, have been detained by the Chinese government in internment camps where they’re forced to work as well as attend re-education sessions.

“My first reaction to the note was, ‘this is real’ and it’s from people who know me,” Humphrey said. “And the second was being overwhelmed with emotion, because I believe that most prisoners in there are suffering more than they deserve.”

--With assistance from Elena Mazneva, David R. Baker, Qian Ye and Dong Lyu.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net;Rachel Chang at wchang98@bloomberg.net

©2019 Bloomberg L.P.