Corporate Social Responsibility / International Business

Walmart Speaks Up After Unfair Treatment In China

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Christina Schmitz

For a household in China, purchasing safe food is a difficult task. China has had problems with food safety since 2008 after the industrial chemical melamine was discovered in milk. Six children died as a result and thousands fell ill. Since then, retailers have found ink, dye, bleach, wax, and other toxic chemicals in their produce. Consumers even found their freshly purchased pork glowing in the dark from a bacterial contamination when they turned out the lights in their kitchens.

It would seem that the six years between 2008 and 2014 would be enough time for China to have solved this dangerous problem. Unfortunately, food safety is still a prominent issue for retailers and consumers. Manufacturers are adding dangerous additives to their produce purely to gain larger profits. “Some companies see that by using additives, they can cut overhead costs or boost profit margins, and they merely aren’t thinking about the affects the additives will have on consumers,” comments Beijing-based attorney, Mr. Ross (Burkitt).

This problem has continued because of the lack of strict and regularly enforced food safety and additive guidelines in China. In other places such as Europe and the United States, food restrictions and safety guidelines are enforced through regular auditing. For example, the Food Standards Agency in Europe works closely with local authority enforcement officers to make sure food law is applied throughout the food chain. The US has recently required manufacturers of imported and exported foods be audited and pass inspections regularly. Along with strict regulations and enforcement, both the US and Europe provide an extensive list of harmful chemical pollutants. In the United States 4,000 harmful chemicals have been identified. In comparison, China lists only 62 illegal, harmful chemical pollutants (Fang).

China has, however, not disregarded the critical need for changes in their food safety regulations. On March 10, 2013 the Chinese government announced the creation of a new “superministry” to ensure the quality of China’s food and drugs. The General Food and Drug Administration will assume responsibility for setting standards and monitoring production, distribution, and consumption—tasks previously handled by as many as nine different government organizations. “The restructuring will better facilitate the enforcement of the food safety laws and regulations, and improve the safety of the nation’s food and drugs,” said Chen Xiaohong, a vice minister of health (Roberts). These changes may have increased the enforcement of local manufacturers in this issue slightly, however a multinational company has been the first to be significantly affected by the Chinese goals for better food safety.

Walmart has recently become the center of the food safety scandal in China, after being fined $9.8 million dollars for selling poor-quality products. Chinese authorities have been fining Walmart in small increments over the last few years for things such as the font size of English being larger than Chinese characters on product labels, and labeling “low fat” on items that are not “low fat” according to Chinese standards. In response, Walmart has increased their food testing and inspection procedures and has begun DNA testing on all its meat that is sent out to stores.

Walmart has cooperated by enhancing their food monitoring process, but also challenged the Chinese authorities boldly by “telling them they need to clean up their own act” (Burkitt). The Chinese authorities rarely call out or fine local retailers for food safety problems, or mishandled products. If China wants to fix the food safety problems they should go after all retailers, not only the large multinational companies.  Chinese authorities claim that by focusing on larger companies and publicizing the consequences of mishandled and unsafe food, it serves as a lesson for all manufacturers and retailers.

This may be effective as a warning to all retailers and manufacturers, however further action, subjecting retailers and manufacturers to strictly enforced tests and inspections, may be more successful. Simply publicizing consequences of a large company may not be a sufficient motivator for smaller retailers to stop using additives. For a small local manufacturer, knowing Walmart is being fined and punished for failure to meet safety requirements may not result in any change in their manufacturing process, simply because there is no immediate threat or consequence. A direct and real pressure to change harmful manufacturing is a more beneficial method, as it provides a very real chance of inspection which may be more useful in ensuring the quality of the food in China nationwide, regardless of size, type or origin of the specific company under scrutiny.

Although Walmart is certainly at fault for their lack of proper food safety procedures in China, their daring comment to the Chinese authorities raises important issues for achieving greater food safety in China. Simply using a large company as an example of wrongdoing and consequence cannot be the sole response to the use of harmful additives in Chinese produce. Perhaps strict food safety laws and guidelines, and their enforcement through regular and random inspections along the entire supply chain and equally among local and multinational retailers would serve public health and the interest of Chinese consumers better.

 

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Burkitt, Laura. “Wal-Mart Cries Foul on China Fines”.  Wall Street Journal. Apr. 2014. Web. 14 April. 2014. <http://online.wsj.com/news/articles/SB10001424052702304157204579473272856969150?mg=reno64-wsj&gt;.

Burkitt, Laura. “Why China Struggles with Food Safety”. Wall Street Journal. Apr. 2011. Web. 14 April. 2014. <http://blogs.wsj.com/chinarealtime/2011/04/25/why-china-struggles-with-food-safety/&gt;.

Fang, Marina. “How Lax Regulations Are Turning China Into A Food Safety Nightmare.” ThinkProgress RSS. N.p., 26 July 2013. Web. 20 Apr. 2014. <http://thinkprogress.org/health/2013/07/26/2362211/how-lax-regulations-are-turning-china-into-a-food-safety-nightmare/&gt;.

Roberts, Dexter. “China Sets Up a Food Safety Super-Regulator.” Bloomberg Business Week. Bloomberg, 14 Mar. 2013. Web. 20 Apr. 2014. <http://www.businessweek.com/articles/2013-03-14/china-sets-up-a-food-safety-super-regulator&gt;.

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