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Walmart To Improve China Vendor Compliance Process

Walmart promised to improve its vendor compliance processes in the wake of accusations by China’s government-controlled television broadcaster CCTV that the giant retailer side-stepped quality, trade and food permits, dealt with unlicensed vendors, and provided premature and unwarranted approval for certain highly profitable products.

Although Walmart denied the accusations and said it maintains strict oversight on all operations, the retailer still announced it would impose major compliance upgrades demanding that vendors provide more documentation as required by Chinese regulations.

Walmart said it would ensure that “the correct documents and other required items are in place before the products are sold in our stores.”

That documentation would include product labels that accurately and completely indicate all ingredients, test reports from government labs, sample products and photographs where required, manufacturing permits, substantiation of health claims, and verification of other claims for products, such as “organic” and “world-famous.”

Walmart will also require products to carry official bar codes and intellectual property products will be required to provide documentation.

The new requirements are expected to generate one million documents annually.

To accommodate the collection, filing and retention of this anticipated paper blizzard, Walmart said in a statement that the company, “has now invested in a computer-based system enabling vendors to upload all required legal documents. This system was piloted in September 2013 and is now ready for broad-based application across the supply chain.”

Walmart, which currently owns more than 400 stores and warehouses in China, was not the only foreign company accused by CCTV of violating government regulations, producing low-quality goods or having pricing issues and sub-par customer service.  Apple, GlaxoSmithKline, Samsung, Starbucks and Volkswagen were among the others accused, according to a Reuters report.