Wal-Mart Stores, Inc. (NYSE:WMT) is concerned about the labels on products the retail giant sells. In a memo issued to hundreds of suppliers, like Kraft Heinz Co (NASDAQ:KHC), Wal-Mart is urging everyone to pay attention to the little details. Apparently, the company is concerned about misleading customers, not complying with labeling laws and facing fines.
Wal-Mart to Manufacturers: Be Careful
In a notice dated July 20, Wal-Mart (NYSE:WMT) is urging companies to ensure there is no dispute between the exterior package and what is actually inside the box. For instance, the amount inside the packaging must match what is printed on the labeling.
The retailer cited legal requirements – federal, state and corporate – for both packaging and labeling.
Furthermore, Wal-Mart confirmed that if the products fail to comply with the rules then the suppliers will be held responsible and not the company or Sam’s Club warehouse club subsidiary. If any fines are slapped on Wal-Mart then the cost would be passed on to the supplier.
This is a reminder to our suppliers to make sure their labeling matches what’s in the product. We want our customers to know they can have faith in the products they buy,” a company spokesperson stated in the memo.
He did not confirm if this notice is in relation to any specific incident.
With that being said, it could be a reaction to the various newsworthy packaging and pricing errors that have affected numerous brands, including Wal-Mart.
Stores Misleading Customers on Packaging
In June, Truthinadvertising.org (TINA.org), an advertising watchdog group, discovered hundreds of products on the Wal-Mart website labeled “Made in the USA” when they were “Made in China.” Also, many supposed “Made in the USA” products contained foreign elements.
The Federal Trade Commission (FTC) explicitly states the difference between “Made in…” and “Assembled in…”
Wal-Mart (NYSE:WMT) responded to the report and blamed the mishap on its suppliers. It promised to rectify the errors immediately and perform a quality assurance review on all its labeling.
The global brand recently pledged to sell $250 billion worth of U.S.-made products over the next decade. It has also urged suppliers to cut back on marketing budgets so it can offer lower prices to customers. Wal-Mart is attempting to gain back its low-price advantage, which has fallen over the past couple of years.
Last month, the premium grocer’s co-CEOs issued an apology after it was found many customers were overcharged for an array of products. The New York City Department of Consumer Affairs (DCA) found eight New York City stores had improper weights on pre-packaged foods in 80 different categories. This mistake, dating back to 2010, led to overcharges between $0.80 and $15 per product.
Whole Foods Market faced thousands of violations. The first violation has a fine of up to $950, and another $1,700 for further violations. The company promised customers can receive their products for free if it’s found they have been overcharged.
It doesn’t end there.
Last year, CVS Health Corp (NYSE:CVS) was required to pay $225,000 in California for misleading packages for various store-brand products. Products were placed in boxes that misled shoppers into thinking they were going to receive more than what was inserted.