(Yicai Global) July 6 -- Gree Electric Appliances has denied allegations of dishonest practices after the Chinese home appliance giant was stripped of its successful bid for part of China Mobile’s bulk air-conditioner contract last week. It also launched a counter offensive against the complainant, competitor Midea Group.

Zhuhai-based Gree claimed in social media posts today that Midea’s Chongqing subsidiary won many tenders from China Mobile in the past despite inconsistent invoice information and technical parameters that failed to meet standards. It has referred the issue to China Mobile to seek fair treatment.

In response, a Midea source told Yicai Global that the company is in talks internally with the Chongqing unit. Neither Midea nor its subsidiary are yet to give an official response on the matter.

China Mobile’s bulk-buy orders for high-pressure centrifugal chillers were worth CNY63.3 million (USD9 million) this year. Midea and Gree won the bidding, with a 70 percent and 30 percent share, respectively. China Mobile stripped Gree of its win for alleged dishonest practices and will also lower its mark in future competitive tenders for products of the same category over the next three years, it said in a statement on July 2.

Yicai Global learned that China Mobile’s decision to disqualify Gree was due to a complaint lodged by Midea. But Gree issued a clarification on July 4, saying that the issue was caused by a bidder’s error rather than a deliberate fraud, adding that Midea had committed a malicious slanderous attack in the incident.

Gree and Midea are the top two in China’s central air-conditioning market. The country’s sales of central air-con units, including large water chillers, slumped 34 percent in the first quarter from a year earlier to CNY13.4 billion (USD1.9 billion), the lowest figure in five years, due to the fallout from Covid-19, according to industry website ChinaIOL.

Zhang Jianfeng, executive deputy secretary-general of the China Household Electrical Appliances Business Association, said in an interview with Yicai Global that he hopes the industry leaders will get back to quality development, pay more attention to tech innovation and user operation, and set an example for the sector’s healthy development and fair competition, rather than spending all their energy on internal feuds.

Editors: Dou Shicong, Peter Thomas