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Wal-Mart sets new rules for its China suppliers

Associated Press / October 23, 2008
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BEIJING - Wal-Mart Stores Inc., the world's largest retailer, said yesterday it will set new quality standards for its suppliers, following a series of scandals involving Chinese-made products, which account for a major portion of the company's sales.

Meanwhile, the United Nations recommended China increase oversight of its food safety system and hold businesses accountable for their products, amid the latest scandal involving tainted milk products that have killed several babies and sickened tens of thousands across China.

Mike Duke, the vice chairman of Wal-Mart Stores Inc.'s international division, said the company has been working on the initiative for three years, but recent scandals over the quality of Chinese-made products have made transparency in the supply chain "even more important."

"We have to ask all our suppliers to take full responsibility," Duke told the Associated Press. "Not . . . just the factories or final production, but to go all the way upstream to look at any products, any raw materials that go in the products."

While Duke said the new standards applied to all products, confidence in Chinese products has been sagging after high levels of industrial toxins were found last year in exports ranging from toothpaste to toys.

In 2007, melamine was found in a Chinese-made pet food ingredient and blamed in the deaths of dozens of dogs and cats in North America.

In August 2007, Wal-Mart quietly began pulling two brands of dog treats from its shelves after tests found they contained traces of the industrial chemical melamine. The Bentonville, Ark., retailer began the tests after several customers complained about the items sickening their dogs.

Later that year, Mattel Inc. recalled more than 21 million Chinese-made toys worldwide because they contained lead paint or tiny, detachable magnets that might be swallowed.

Wal-Mart also sold cribs recalled this week by New York-based Delta Enterprises, some of which were made in China. The cribs, sold between January 1995 and September 2007, were blamed in the deaths of two babies and have potentially faulty safety pegs or were missing the pegs.

China is still reeling from the revelation last month that melamine, used to make plastics and fertilizer, was added to infant formula to artificially boost nitrogen levels and make it seem higher in protein when tested.

Melamine-laced baby formula has been blamed for the deaths of four babies and sickening another 54,000 children.

Contamination has since turned up in powered and liquid milk, yogurt, and other products made with milk. Dozens of countries have pulled Chinese-made goods with dairy ingredients off their shelves to test for melamine.

Wal-Mart's Mike Duke said the retailer has been working on a plan for its vendors 'to take full responsibility' for product quality.

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