Political Motives Seen In Walmart's China Trouble

Beijing: Wal-Mart is getting another public bludgeoning in China as popular anger over food safety makes the retail giant an easy target for political point scoring ahead of a central government leadership shuffle.

Authorities in the city of Chongqing have arrested two employees, closed 13 Wal-Mart stores for two weeks and fined the company 2.7 million yuan ($421,000).

Even though Wal-Mart has developed a reputation for lax quality control in China, analysts said the penalties seem harsh in light of the violation: passing off regular pork as higher-priced organic meat.

"It seems very excessive. I could see if they were ordered to stop selling pork or to shut down their fresh meat cases," says Torsten Stocker, Hong Kong-based head of the consumer goods practice at US consulting firm Monitor Group. "But why close down the entire store? It seems a very strong reaction."

Wal-Mart, based in Bentonville, Arkansas, said it was cooperating with the Chinese government's investigation into the problem but declined to comment further. Chongqing officials could not be reached for comment.

Food safety is a sensitive issue in China. In recent years, the country has been rocked by a series of food scandals, from deadly infant formula to chemical-laced pork and recycled restaurant oil tainted with potentially deadly molds.

Central and local level leaders are keen to show they are tackling the problem.

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