China Central Television claims to know the secret behind Wal-Mart’s low prices at its stores in China. The state-owned TV network, better known as CCTV, said on Jan. 23 that the US retailer has been allowing products from unlicensed suppliers (video in Chinese) on to its shelves, and thus bypassing quality and safety checks.
Wal-Mart’s response (paywall), the Wall Street Journal reports, is that the company only fast-tracks items from suppliers with which it has already been doing business, and then only in certain limited cases. (Wal-Mart hasn’t responded to questions from Quartz.)
The four-minute CCTV report, titled “Wal-Mart’s ‘special channels’ secret,” features shots of what CCTV says are company documents that show managers signed off on over 600 products that lacked licenses for distribution. The program says the store passes off sub-standard goods as belonging to well-known brands.
This isn’t the first time Wal-Mart has run into trouble in the world’s largest grocery market. Earlier this month, the chain recalled donkey meat that contained traces of other animals. In December, a man in northern China accused the company of trying to sell donkey meat disguised as fox meat.
But the affair is also a sign of the power of CCTV, which has been pillorying foreign firms in China in the name of consumer rights over the past year. In some cases the reports gain traction with consumers. Apple issued a lengthy apology in April to customers in China after a CCTV report on the company’s warranty policy fueled weeks of attacks from Chinese media. Wal-Mart, which has over 400 stores in China and plans to open 110 more, would be wise not to make the same mistake.
Jennifer Chiu contributed additional reporting.