Wal-Mart Recalls Tainted Meat in China

Wal-Mart Stores said that it has recalled donkey meat sold at some outlets in China after tests showed the product contained the DNA of other animals.

The US retailer has set up an investigation team to look into the incident, and pledged to strengthen food safety rules and take legal action against the product supplier. It added that the individual in charge at the supplier factory had already been detained.

While it only accounts for a tiny fraction of overall meat consumption, donkey meat is a popular snack in some areas of China. According to country’s livestock industry yearbook, in 2011 China slaughtered 2.4m donkeys,

Wal-Mart will reimburse customers who purchased the tainted ‘Five Spice’ donkey meat and is helping local food and industry agencies in eastern Shandong province investigate its Chinese supplier, it said in official posts on China’s Twitter-like Weibo. The Shandong Food and Drug Administration earlier claimed that the product contained fox meat.

“We are deeply sorry for this whole affair,” said Wal-Mart’s China president and chief executive officer (CEO), Greg Foran. “It is a deep lesson (for us) that we need to continue to increase investment in supplier management.”

The episode could undermine Wal-Mart’s reputation for quality in China’s US$1 trillion food and grocery market, where it plans to open 110 new stores in the next few years. China is the world’s largest grocery market and is set to grow to US$1.5 trillion by 2016, according to the Institute of Grocery Distribution.

“This is another hit on Wal-Mart’s brand, meaning wealthy shoppers will start to lose the trust they had before,” said Shaun Rein, Shanghai-based managing director of China Market Research (CMR) Group. CMR estimates Wal-Mart’s market share in China has declined from 7.5% to 5.2% over the past three years.

In 2011, China fined Wal-Mart, along with French retailer Carrefour, a combined 9.5 million yuan (CNY), equivalent to US$1.57m for manipulating product prices and the group was fined separately that same year for selling duck meat in China that was past its expiry date.

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