Ten Wal-Mart stores and two affiliates have been ordered to temporarily close and pay 2.69 million yuan in fines. [File photo]
U.S. retail giant Wal-Mart has been ordered to temporarily shut down some of its stores in southwest China's Chongqing and pay fines totaling 2.69 million yuan for deliberately mislabeling regular pork as "organic".
Several Wal-Mart employees believed to have been involved in the false labeling have been detained by Chongqing police. According to Huang Wei, deputy director of Chongqing's Public Security Bureau, the police will follow formal legal procedures, including asking the procuratorate to arres t, and potentially prosecute suspects.
Ten Wal-Mart stores and two Trust-Marts have sold 63,547 kilograms of mislabeled pork in the past 20 months, generating approximately 730,000 yuan (US$114,500.82) of illegal income, said Huang Bo, director of the Chongqing Administration of Industry and Commerce. Wal-Mart's practice at these stores is deemed to have violated China's consumer rights protection law, thereby resulting in consumer fraud.
On October 9, Wal-Mart China said in a statement that its Chongqing branch will fully cooperate with the police and apologized to consumers for any inconvenience.
Wal-Mart opened its first store in Chongqing in 2006, and currently operates 13 stores in the city, including 10 Wal-Mart stores and 3 Trust-Marts, a retail chain it acquired in 2007. However, during the past five years, Wal-Mart has been punished 21 times by Chongqing's industry and commerce authorities for violations including selling expired and substandard food, and exaggerated advertising. The troubled retailer has been punished 9 times since the beginning of this year.
Wal-Mart currently has 230 outlets around China. This does not include local retail chains acquired by the US retail giant. .
According to the company's financial results, Wal-Mart has seen its net sales revenue growth in overseas markets decline over recent years. For the fiscal year 2010, the company achieved a little over US$100 billion, up 1.3 percent year-on-year, compared to the 9.1 percent and 17.8 percent revenue growth seen in 2009 and 2008, respectively.
However in the first half of the fiscal year for 2011, Wal-Mart's net sales revenue was US$58 billion, up 13.9 percent.