In FP's May/June issue, Charles Kenny argues that, for all its faults, Walmart is ultimately a force for good that helps poor people around the world by driving down prices of staple goods. The citizens of Los Angeles, Chongqing, and Teotihuacán might disagree. Here's a look at several Walmarts that have stoked heated debate around world.
San Juan Teotihuacán, Mexico
In Teotihuacán, just a mile from the ancient Aztec pyramids that draw tourists from around the globe, Walmart saw an historic opportunity. A store there, executives calculated, could attract as many as 250 customers an hour. The problem? The location for the new store was an alfalfa field just inside an area near the pyramids that was due to be protected by law in 2003.
The protection agreement was all but finalized until Walmart officials decided to pay a $52,000 bribe to a Mexican zoning administrator to change the layout of the protected area surrounding Teotihuacán, according to a New York Times investigation. Months later, Walmart began construction. Frenzied protests followed, but bribe after bribe -- $200,000 in all -- smoothed the way for the store, which opened in December 2004. Back at Walmart headquarters in Bentonville, Arkansas, company executives were aware of the protests and the bribes, but did nothing, according to the Times. The store remains open today. In Mexico alone, Walmart has paid $24 million for permits to open stores.
The day before the Los Angeles City Council voted to ban Walmart from building "big box" stores in the city in March 2012, the company was granted approval for one final supermarket in Chinatown.
In June, thousands of people protested against the new store, noting Walmart's non-unionized workforce and low pay. "We believe small business will be hurt. Some will close down and there will be layoffs," said King Cheung, a member of the Chinatown Committee for Equitable Development, according to the Los Angeles Times. Different groups have sued the city in attempts to prevent the store from opening, but so far Walmart has no plans to shut down the Chinatown store. Its opening was scheduled for March 2013, but has been delayed.
The Chinese government ordered Walmart to shut down its 13 stores in Chongqing in October 2011, after officials discovered it had mislabeled pork as "organic" when it wasn't. The stores were closed for 15 days as investigators looked into the matter, and Walmart was fined $420,000, according to the New York Times.
By the standards of Chinese food scandals, mislabeled pork hardly seems an egregious mistake, but a Walmart official said the company was "deeply sorry for the inconvenience," and that it was even more determined to meet China's service expectations. Those expectations, the Times notes, are often higher for foreign companies than domestic ones.
The power of China's giant consumer market and manufacturing industry has been able to force the corporate giant's hand on other occasions as well. Employees at Walmart stores in China, for instance, are allowed to unionize. The company has almost 400 stores in China.
Johannesburg, South Africa
In September 2010, Walmart put up $4.6 billion to buy Massmart, a South African supermarket chain, making clear it had plans to move into the newly expanding economies of Africa.
But the deal drew protests from anti-capitalist campaigners, politicians, and local unions. Saccawu, a shopworkers union, appealed the decision to the Competition Tribunal of South Africa, according to the Guardian. Union officials said they were afraid of job losses and damage to the livelihoods of local store owners. Months later, a South African court gave jobs back to 500 workers who had been fired, but essentially swatted away all other concerns about the Walmart-Massmart merger.
Despite the protests, the deal went through. Walmart now has shops in 12 African nations.
Walmart had big plans for India, once aspiring to be the country's top retailer by 2015. But allegations of corruption and the perils of navigating India's byzantine system of rules and regulations have scuttled these hopes, and today the company has had to settle for incremental growth amid controversy.
A 2012 disclosure that Walmart spent $25 million on lobbying related to "enhanced market access for investment in India" created an uproar in the country, and members of the opposition Bharatiya Janata Party accused Walmart of using some of those funds to grease a few palms in an attempt gain a foothold in India. (The BJP has also spoken out against the company, and foreign investment in retail in general, voicing fears for the fate of local stores.) Walmart has staunchly maintained that the expenditures were related to standard lobbying activity, and at least one analyst has called the accusations "ill-informed," but that didn't stop the government from scheduling an inquiry into the issue. Walmart has since stopped opening new stores pending completion of the bribery probe, according to the Economic Times. It is also engaged in an ongoing internal investigation encompassing its Indian operations that has resulted in the suspension of several senior executives there.
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