The Low Post News

Walmart in China Increasing Spending on Food Safety

Walmart Stores, the biggest retailer in the world announced Tuesday that it is increasing its food safety spending in China to 300 million yuan or $48.32 million in 2014 and 2015, which is up from the 100 million yuan previously announced during the same period.

The company added that it would increase the DNA testing on its meat products and its supplier inspections as well as test more stores in the country using its two safety labs on wheels.

The grocery and food market in China, which is estimated to surpass $1.5 trillion by the end of 2015, is crucial for Walmart.

McDonald’s Corp, Yum Brands, Walmart and Carrefour from France along with others have been criticized for food safety, a topic that is sensitive in a country facing things from cadmium-tainted rice to melamine-tainted milk to gutter oil that is recycled and used in cooking.

The reputation of Walmart of food safety in the country was attacked earlier in 2013 after its donkey meat was determined to contain fox meat.

Then-CEO and President Greg Foran of the China business of Walmart said it was a reminder that more investment was needed in supplier management.

In 2011, Walmart ran into problems when it was given a fine for selling duck meat that was expired.

Walmart has as many as 7,000 food suppliers currently in China. It eliminated 4% of the suppliers recently for failing DNA tests or audits.

The Chief Compliance Officer for Walmart in China, Paul Gallemore said that similar challenges faced by Walmart that are faced by all retailers doing business in China, when it pertains to product sourcing. There is zero tolerance at Walmart for adulterated goods.

He added that the company’s contact with regulators from China for food safety is currently on an ad hoc working system, but he hopes to have meetings more regularly.

Walmart now operates over 400 facilities inside China and its competition is with the leaders in the market such as China Resources Enterprise and Sun Art Retail Group.

In October of last year, Walmart announced it would be opening 110 new locations in China from 2014 to 2016.

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