Walmart (WMT), the world's largest retailer, was forced to recall donkey meat in some of its stores in China after tests revealed that the meat contained DNA of other animals, including fox. Walmart said it would reimburse customers who purchased the tainted "Five Spice" donkey meat.
"We are deeply sorry for this whole affair," said Greg Foran, Walmart China president and CEO, in a statement. "It is a deep lesson (for us) that we need to continue to increase investment in supplier management."
The tainted meat scandal could have big ramifications for Walmart. The retailer has plans to open 110 new stores in China over the next few years. The grocery store market in China is the largest in the world and is expected to grow to $1.5 trillion by 2016, according to the Institute of Grocery Distribution.
Food safety has been a major concern for Chinese consumers. Last year rat meat labeled as lamb was sold in Shanghai. In 2012 China's largest dairy producer had to recall some of its baby formula products after an "unusual" level of Mercury was found in them. In 2008 six children died and about 300,000 became ill from infant formula contaminated with the industrial chemical melamine. Chinese consumers unknowingly purchased eggs that contained toxic levels of melamine a few years ago.
Yahoo Finance's Aaron Task and Jeff Macke discuss the scandal in the attached video; watch what they have to say about Walmart's future in China.
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- Consumer Discretionary