Wal-Mart rapped by China over pork prices

Wal-Mart has been rapped by Chinese authorities for allegedly mispresenting ordinary pork as the more expensive organic pork at a time when the government is trying to tame rising food prices.

Holiday shoppers leave the Wal-Mart store in Fairfax, Virginia
Wal-Mart has a mixed record of overseas expansion, and is also trying to find ways to reverse a decline in sales in the US Credit: Photo: AFP

Officials in the southwestern city of Chongqing ordered on Sunday that the US retailer close 10 of its stores and pay a fine of 2.69m yuan (£269,000). Wal-Mart said that it had agreed to close the stores for 15 days to "complete comprehensive actions to upgrade the standards in these Chongqing stores."

China is a key market for Wal-Mart, the world's biggest retailer that has a mixed record of overseas expansion and is also trying to find ways to reverse a decline in sales in the US. The retailer has been in Chongqing since 2006 and has been targeted by officials 21 times, according to the local government.

Observers said that the latest move owes something to local politics. Bo Xilai, a senior local government official, is seeking elevation to the national Politburo Standing Committee. "Taking a hard line against a foreign business on issues of popular concern is a strong power-jockeying tactic," said Shaun Rein of China Market Research Group.

The move against Wal-Mart comes as the Senate prepares to vote on Tuesday on a measure that would impose tariffs on China for employing a policy that deliberately weakens its currency. The policy of the Chinese government has long been the target of anger for some US politicians, who blame it for handing Chinese exporters an unfair advantage and for adding to job losses in America.

The Chinese Foreign Ministry warned that a vote in favour by the Senate would be a step on the path to a trade war.