Canada Goose Fined For Running Misleading Ads In China

High-end parka maker Canada Goose (TSX:GOOS) has been fined by China and accused of misleading consumers in its advertisements.

Canada Goose is the latest foreign brand to be targeted by Chinese regulators amid political tensions between Beijing and the west. Shanghai’s market regulator fined the retailer’s local China unit $71,000 U.S.

The Chinese regulator said Canada Goose’s claims of using "the warmest material from Hutterite," referring to communities that produce some of the world’s most luxurious goose down, deceived shoppers as most of its products are made with other materials.

China’s powerful State Council said the ads are evidence that Canada Goose hasn’t obeyed Chinese advertisement laws.

While the Chinese market has become a growth driver for global brands, political tensions with western countries over everything from trade to human rights are fueling nationalism among mainland Chinese shoppers.

Relations between Ottawa and Beijing are especially strained over the holding in Canada of Huawei Technologies executive Meng Wanzhou, who was detained in December 2018 days before Canadians Michael Kovrig and Michael Spavor were taken into custody by China and accused of spying. Last month, Spavor was sentenced to 11 years in prison.

A threatened boycott after Meng’s detention in 2018 caused Canada Goose to delay the opening of its flagship store in Beijing.