Wal-Marts in Chongqing closed for pork mislabeling

[BilLing]

AP ¨C Mon, Oct 10, 2011

 

SHANGHAI (AP) ¡ª Wal-Mart has been ordered to temporarily close some stores in the Chinese city of Chongqing and to pay 2.7 million yuan ($421,000) in fines following an investigation into the mislabeling of tons of regular pork as "organic."

 

The retail giant said Monday in a statement that Chongqing police had detained some of its employees over what has been dubbed the "green pork" incident. It apologized to shoppers for any inconvenience and said it was cooperating with authorities.

 

Wal-Mart has 10 stores and two affiliates in Chongqing, a massive metropolis of 32 million people in western China. The company said it was ordered to close some of its stores in the city, but did not say exactly how many. State media reported all 12 stores were temporarily closed.

[Randy W]

http://www.china.org.cn/business/2011-10/12/content_23607000.htm

 

However, during the past five years, Wal-Mart has been punished 21 times by Chongqing's industry and commerce authorities for violations including selling expired and substandard food, and exaggerated advertising. The troubled retailer has been punished 9 times since the beginning of this year.

 

That's not to say that a similar Chinese retailer wouldn't be held to the same standard, however.

[Randy W]

Wal-Mart management loopholes suspected after pork mislabeling incident

 

Some analysts said the government's lax supervision of foreign companies is also to blame, arguing that some laws and regulations have not been effectively enforced by relevant government departments and that punishments for violators are sometimes too light to have a deterrent effect.

 

Analysts said that some local governments have set less stringent supervision standards for foreign companies than for Chinese-owned companies in order to attract more foreign investments.

 

Tang said that the cost of breaking the law is too low for foreign companies.

 

"Comparing to the amount they've earned, the fines are an extremely small amount of money," Tang said.

 

The Chongqing municipal government started a campaign this year to crack down on food safety violators. The local government has shut down 91 companies and revoked 602 production licenses during the campaign so far.

[knloregon]

Great post BiLing, anytime a Candle member can be on top of a breaking Chinese story--- (and I haven't seen this one in the wester press) --- good inside info...

[BilLing]

Thanks. Boots on the ground in Chongqing.

[Beachey]

This is what is really going on:

Political analysts said Chongqing officials are showing off their political muscle in attempt to gain higher standing in a once-a-decade-leadership transition next year. The region's top Communist party chief, Bo Xilai, is poised for a promotion to the Politburo Standing Committee, China's highest decision-making body. Crackdowns on corruption and food safety, experts said, are likely to bolster Mr. Bo's image as a consumer watchdog.

 

 

Bo Xilai is the man who built Dalian in the 1990's and early 2000's and is extremely popular here. He is already in the Politboro (Top 30) but wants to on the Standing Committee (Top 9).

 

Wal-Mart is a better target than New-Mart (upscale Chinese Supermarket).

Edited October 13, 2011 by Beachey (see edit history)

[Randy W]

This is what is really going on:

Political analysts said Chongqing officials are showing off their political muscle in attempt to gain higher standing in a once-a-decade-leadership transition next year. The region's top Communist party chief, Bo Xilai, is poised for a promotion to the Politburo Standing Committee, China's highest decision-making body. Crackdowns on corruption and food safety, experts said, are likely to bolster Mr. Bo's image as a consumer watchdog.

 

 

Bo Xilai is the man who built Dalian in the 1990's and early 2000's and is extremely popular here. He is already in the Politboro (Top 30) but wants to on the Standing Committee (Top 9).

 

Wal-Mart is a better target than New-Mart (upscale Chinese Supermarket).

 

Basically that foreign companies are much better (politically) targets than Chinese.

 

It's pretty well known that a foreign-owned business should not try to cut corners with the law that a Chinese run store could easily get away with.

 

On a side note, I went to the Wal-Mart here in Nanning. It seems to pretty well carry the same/similar merchandise to what's available in other stores -

"It's no surprise that we came in the beginning with an Americanized concept," said Wal-Mart China Chief Executive Ed Chan. Now, "We tailor to the city, to the culture, and we learn from our competition."

[Beachey]

 

Basically that foreign companies are much better (politically) targets than Chinese.

 

It's pretty well known that a foreign-owned business should not try to cut corners with the law that a Chinese run store could easily get away with.

 

 

The other factor is a US company operating in China is subject to US law; bluntly they can't bribe officials without subjecting themselves to huge legal risk in the US.

 

Chinese companies have no such restrictions.

[dnoblett]

Great post BiLing, anytime a Candle member can be on top of a breaking Chinese story--- (and I haven't seen this one in the wester press) --- good inside info...

China Daily posted that Tuesday on their USA site, and on Facebook

 

http://www.chinadaily.com.cn/usa/business/2011-10/11/content_13866656.htm

 

http://www.facebook.com/ChinaDailyUSA

[BilLing]

This post from a local expat club.It's where i found the original report.

 

"The Walmart CEO was in Chongqing during the October break with a contingent of Asian Management staff.

 

How do I know this?

 

They breezed past me while I was shopping for new household items on one of my very rare visits to the store in Jiangbei.

 

He later spent some time at the CAIC office in Jiangbei which is the department responsible for Industry and Commerce compliance and Customer complaints.

 

How do I know this

 

I was in my local Police station following the holiday to register my change of address, under the same jurisdiction as my local Walmart when a police officer came into the office and mentioned Walmart. This began a conversation with my new landlady who just happens to work for CAIC and is where I now reside.

 

I told her I had seen him ( a CEO), and she confirmed he had been hauled over the coals about the situation here in CQ regarding the not-so-organic pork meat.

 

However they are not the only supermarkets being duped in this matter but a company like Walmart should be observing Due Diligence when is comes to 'organically grown' products in a country that produces so little of this type.

 

There are other supplies of quality meat but there is no way to check how it is raised. .............. Bon Apetite"

 

Rumor that the closings are 15 days.

[Beachey]

 

I told her I had seen him ( a CEO), and she confirmed he had been hauled over the coals about the situation here in CQ regarding the not-so-organic pork meat.

 

However they are not the only supermarkets being duped in this matter but a company like Walmart should be observing Due Diligence when is comes to 'organically grown' products in a country that produces so little of this type.

 

There are other supplies of quality meat but there is no way to check how it is raised. .............. Bon Apetite"

 

 

 

 

 

That is the other part of this story that is humorous to me. The definition of what is "Organic" varies so widely in the US that it is really hard to know what you are buying unless you go to the farm itself where the food is produced. I would think that most meat in China is more organic that what is labeled as organic in the US.

 

I am no fan of Wal-Mart but they are just a pawn in this whole situation.

[Beachey]

 

Wal-Mart says China CEO stepping down

 

"He wants to spend more time with his family." Wal-Mart know this is a game that they have to play since the Party is the home team.