Wal-Mart is recalling donkey meat at some of its stores in China. Donkey meat may not appeal to some Western palates, but in China they eat donkey. Tests revealed that donkey meat which was sold to Chinese consumers contained DNA of other animals.
Wal-Mart's China CEO, Greg Foran said, "We are deeply sorry for this whole affair. It is a deep lesson (for us) that we need to continue to increase investment in supplier management."
On Wednesday, Wal-Mart announced that it will refund customers who purchased the contaminated donkey meat. The company is now working with Eastern Shandong food inspectors to investigate it's Chinese suppliers.
China is a country that has suffered rampant tainted food scandals, and scares like this one are a big deal. Recently, KFC's chicken supplier, Yum Brands, saw a steep decline in sales after it was found to be using high levels of antibiotics in its meat products. Wal-Mart is now concerned that it may lose consumer confidence in China. This could become a big problem for Wal-Mart given that the company is jockeying for market share against retailers like Sun Art Retail Group Ltd and China Resources Enterprise Ltd. China represents a $1 trillion dollar food market in which Wal-Mart plans to add 110 new stores to the 400 facilities they currently have in the country.
According to China's livestock industry, nearly 2.5 million donkeys were slaughtered in 2011. This makes donkey meat a relatively popular food in China.
This is not the first food safety issue Wal-Mart has had in China. It was fined in 2011 for selling duck meat past its expiration.
Wal-Mart, the world's largest retailer, will likely need to do some damage control -- quickly. Word is already spreading fast in Chinese social media and some consumers are starting to have a negative perception of the company.
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