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Pork Scandal in China Closes Some Wal-Mart Stores

by Claudia Bruemmer

Wal-Mart in China is accused of selling ordinary pork as organic pork in the southwestern city of Chongqing. As a result, some Wal-Mart stores will close temporarily. “We have agreed to temporarily close some stores in Chongqing for 15 days. We believe this will allow us to complete comprehensive actions to upgrade the standards in these Chongqing stores,” said a Wal-Mart spokesperson in a statement.

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The official Xinhua news agency said late Sunday that Chongqing’s municipal government will shut ten stores. Wal-Mart was fined Rmb 2.69 million (USD $423,548) by authorities in China for mislabeling ordinary pork as organic. Wal-Mart said it sent a task force to Chongqing several days ago to work with the authorities.

Xinhua’s Huang Bo, director of Chongqing’s Industry and Commerce body, confirmed that the ten Wal-Mart stores, and two other stores acquired by Wal-Mart, have been accused of selling 63,547 kilograms of falsely labeled pork over the last two years. Earlier in March, Wal-Mart, which is the world’s largest retailer, apologized for selling duck meat past its expiration date in a store in the Chongqing area.

Wal-Mart China confirmed it was cooperating with the investigation by the Chongqing Administration of Industry and Commerce. Furthermore, some of the company’s employees were detained by the Chongqing Public Security Bureau. The U.S.-based retailer declined to comment on the fine, which was announced by Xinhua, the official Chinese news agency, quoting government officials in Chongqing.

In a statement, Wal-Mart said, “We believe the closure has come about as a result of the recent investigation in some of our stores in Chongqing due to the issue of mislabeled pork.” The company said the store closures would allow them time “to focus on implementing corrective actions.”

Paul French, an analyst at the Shanghai marketing consultancy Access Asia, said large retailers in China have been in trouble before for mislabeling food products, in addition to selling food after its sell-by date. However, he said this was the first time he heard of a product being wrongly passed off as organic.

French explained that, following a scandal earlier this year involving the toxic additive clenbuterol hydrochloride in pork in China, labeling a meat as organic would serve as a way of boosting sales. “People view organic as a guarantee of quality,” said French. “The problem in China is we have no central certification authorities; £1,000 in an envelope will get you the certificate you need,” he added. Late last month, China’s Ministry of Agriculture said it arrested nearly 1,000 people involved in the manufacture and sale of the illegal additive.

In January, Wal-Mart and France’s Carrefour supermarket chain were fined for overcharging on promotional items. After Wal-Mart was found to have misstated prices on promotional items at three stores, it promised to refund consumers five times the difference between the price on the promotional label and the price at the cash register if this happened again.

Wal-Mart’s annual sales in China are only USD $7.5 billion, a fraction of its global revenue of USD $420 billion, although Chinese sales are growing at double-digit rates. Wal-Mart has recently had to deal with personnel changes. In May, both Wal-Mart’s chief financial officer and chief operating officer in China resigned for personal reasons. The company declined to comment on the abrupt resignations.


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