Stimulating Consumption

Direct-buy program benefits retail, agriculture

By Liu Jie (China Daily)
Updated: 2009-11-09 07:49

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Sustainability

The Fortune 500 company recently signed a formal Memorandum of Understanding with the Ministry of Commerce and Ministry of Agriculture to launch additional initiatives.

The first was to set up Wal-Mart Fresh Food Distribution Centers to guarantee the freshness and quality of products. Wal-Mart China has set up two small-size distribution centers in Shenzhen and Guangzhou and will continue its efforts in this area, according to the company.

The second initiative was to equip the fresh food distribution centers with food testing stations to ensure food safety. The first one will be located in Guangzhou.

The third initiative was Wal-Mart's sponsorship of training sessions to ensure the sustainability of the program. The company plans to train 200 Wal-Mart trainers this year to instruct farmers.

McMillon said Wal-Mart also will establish information exchange platforms and promote international information exchanges regarding the distribution of agricultural products. "We have similar programs in other nations such as America, Europe and Brazil," he said.

McMillon declined to disclose the amount of commodities Wal-Mart had purchased so far in China, but did say China is one of the retail chain's larger purchasing places.

"We have seen that the quality of commodities we purchased from China has increased, and our suppliers here are considering social responsibility and sustainable development of the environment seriously," said McMillon, who first came to China as a Wal-Mart purchaser in 1993.

Wal-Mart entered the Chinese market and opened its first store in Shenzhen in 1996. The company's global procurement operation has been headquartered in Shenzhen since 2002.

Wal-Mart's rival in China, France-based Carrefour Group, also operates a Direct Farm Program in cooperation with commerce and agriculture ministries.

Lars Olofsson, global president of the French retailing company, said during a visit to China in September that the Direct Farm Program effectively helped reduce its purchasing costs by about 20 percent.

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