Wal-Mart China to raise food safety spending to $48 million

BEIJING Tue Jun 17, 2014 6:36am EDT

A shopping cart full of products is seen as a customer shops at a Wal-Mart store in Beijing, February 18, 2014. REUTERS/Kim Kyung-Hoon

A shopping cart full of products is seen as a customer shops at a Wal-Mart store in Beijing, February 18, 2014.

Credit: Reuters/Kim Kyung-Hoon

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BEIJING (Reuters) - The world's biggest retailer, Wal-Mart Stores Inc (WMT.N), said on Tuesday that it will increase its spending on food safety in China to 300 million yuan ($48.32 million) in 2013, 2014 and 2015, up from a previously-announced 100 million yuan in the same period.

The company said it will also increase DNA testing on meat products and supplier inspections and test more of its stores with its two mobile safety labs.

China's food and grocery market, which is set to top $1.5 trillion by 2016, is crucial for retailers like Wal-Mart and food safety is chief among consumer concerns.

Wal-Mart, French grocer Carrefour SA (CARR.PA), McDonald's Corp (MCD.N) and KFC-parent Yum Brands Inc (YUM.N) among others, have all been criticized on the issue, a sensitive topic in a country that has faced everything from melamine-tainted milk and cadmium-tainted rice to recycled "gutter oil" used for cooking.

Wal-Mart's reputation for food safety in China came under attack earlier this year after its "Five Spice" donkey meat was found to contain fox meat.

Greg Foran, then-president and CEO of Wal-Mart's China business, said at the time it was a good reminder to invest more in supplier management.

Wal-Mart also ran into trouble in 2011 when it was fined for selling expired duck meat.

Wal-Mart currently has about 7,000 food suppliers in China. It cut 4 percent of its suppliers in recent years for failing audits or DNA tests.

Wal-Mart China Chief Compliance Officer Paul Gallemore told Reuters on Tuesday that “we face similar challenges to all other retailers in China when it comes to sourcing products. We have zero tolerance” for adulterated goods.

Gallemore also said the company's contact with Chinese food safety regulators is currently on an "ad hoc" basis, but it hopes to have more regular meetings.

Wal-Mart operates more than 400 facilities in China and competes with market leaders Sun Art Retail Group Ltd (6808.HK) and China Resources Enterprise Ltd (0291.HK), which last August teamed up with British retailer Tesco Plc (TSCO.L).

Wal-Mart said in October it would open up to 110 new facilities in China between 2014 and 2016 and was looking to close 15-30 others over the next 18 months.

(Reporting by the Beijing newsroom and Clare Baldwin in HONG KONG; Editing by Matt Driskill)

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Comments (2)
aunticcp wrote:
The only relations that the rest of the World should be having with the cruel CCP is trying to bring to trial the thousands of Communist Party members who have been and are still committing millions of human rights atrocities.The brutal Chinese Communist Party has murdered over fifty million of its own people since 1949, since 1999 it has been attempting the blood-thirsty genocide of the tens of millions of innocent Falun Gong who live in Mainland China. To this end, the heinous CCP is using torture,slavery, organ harvesting and murder. Because of corporate greed, these atrocities and millions of others have been kept from the Western people by the Western media. The weak United Nations even appointed the brutal CCP a seat on its Human Rights Council this year. Shameful. Thank you for your concern.

Jun 17, 2014 8:46am EDT  --  Report as abuse
ThomJEFFERSON wrote:
Wal-Mart should start working toward helping AMERICA! instead of foreign countries. I have been seeking out other companies that support local and US goods. We need to start supporting our own country.

Jun 17, 2014 9:09am EDT  --  Report as abuse
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