Chinese state TV criticizes Wal-Mart's quality control

Fri Jan 24, 2014 7:18am EST
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By Clare Baldwin and Alice Woodhouse

HONG KONG (Reuters) - A state-owned Chinese TV station which has run a string of stories criticizing foreign firms has accused U.S. retailer Wal-Mart (WMT.N: Quote) of circumventing its quality control process and fast-tracking some products with higher profit margins.

The report by China Central Television (CCTV) was based on an interview with an anonymous former Wal-Mart employee and cited more than 200 documents dating from 2006 that referenced a "special approval process" and mentioned alcohol suppliers that did not have production permits.

Wal-Mart, the world's No. 1 retailer, said it keeps a close watch over its supply chain and only uses its special approvals process in specific circumstances, such as when a supplier changes the size of a product or switches distribution agents.

"Our special approval process is used to accelerate listing items from suppliers we already do business with. The process requires three levels of management approval on an item by item, supplier by supplier basis. This ensures that we do not sell fake or inferior products nor we compromise the welfare or safety of our customers," Wal-Mart said in a statement.

"In the past year we have stopped selling hundreds of items that we believe fall short of the quality expectation our customers deserve," the company added.

CCTV 13, the broadcaster's Chinese language news channel, functions both as a mouthpiece for the ruling Communist Party and a platform for news reports.

Wal-Mart is the latest in a series of foreign companies it has taken to task on issues ranging from pricing to poor quality products and shoddy customer service.

Companies it has criticized include coffee chain Starbucks (SBUX.O: Quote), consumer electronics groups Apple (AAPL.O: Quote) and Samsung   Continued...

The Walmart logo is pictured at its store in the Porter Ranch section of Los Angeles November 26, 2013. REUTERS/Kevork Djansezian