Wal-Mart and Green Pork

The story involving Wal-Mart selling pork mislabeled as organic in the Western China province of Chongqing is being played out on two tracks. One is regulatory, the other seems to be political.

Reports widely circulated today state that the chain’s China operation has been fined nearly a half-million dollars for selling more than 14 tons of mislabeled pork (it’s being referred to as the Green Pork incident, for reasons that escape me). Several employees have been detained for questioning and the lead agency investigating the case, the Chongqing Administration of Industry and Commerce, has ordered the closing of stores. Wal-Mart operates 10 stores and a couple of affiliates in the province.

Wal-Mart officials say the closures could last up to 15 days, a period that “will allow us time to focus on implementing corrective actions.”

“We have fully cooperated with the investigation and focused upon the fastest implementation of corrections suggested by the local AIC,” read a statement from Walmart China Investment Co. “Some Walmart associates have been detained by the Chongqing Public Security Bureau (PSB). Walmart China is cooperating fully with the PSB and doing everything possible to conclude the investigation.”

Chongqing is a huge metropolis, according to published reports on the incident — home to some 32 million people. The market holds enormous potential for any company operating in the region.

An official with the government agency says Walmart China has been punished 21 times since opening in Chongqing in 2006 for violating consumer protection laws similar to the current labeling fiasco, transgressions that have allegedly included selling expired and substandard food.

Yet, if the case is entirely about the sale of mislabeled pork, then is it necessary to close stores throughout the province? This wasn’t a food safety issue, where lives and health were at stake. There seems to be something else at play here — and the statement from company officials makes one wonder if even Walmart understands the actions the government took: “We believe the closure has come about as a result of a recent investigation in some of our stores in Chongqing due to the “green pork” incident by which the rights of consumers were infringed.”

We believe?... In a country rife with food purity problems, questionable sourcing and outright corruption, the Chinese government has the obligation to conduct a thorough, but transparent investigation. In this case, it seems as if Walmart China’s pledge to cooperate fully with authorities is not being matched. The behavior of Chinese authorities gives rise to the suspicion that, because Wal-Mart is a foreign company, that the incident and subsequent actions are sending a veiled political message to other outside companies.

Walmart has the resources to work through and settle this matter. It likely won’t have any impact over here — it’s too far removed from our domestic conscience and there’s domestic skepticism about food products from China already — but it does further damage the country’s already-tainted reputation as a reputable source of imported foods.

[Photo credit: David Woo]