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Quick Hits: Wal-Mart Products - Soon Less Toxic!


Brief scrutiny of today's headlines.

Wal-Mart (WMT) is moving quickly to set new quality standards for its suppliers after toxic milk products sickened tens of thousands of babies across China.

China has been shockingly lax in health and safety issues. Wal-Mart, the nation's largest foreign retailer, will apply the new standards to apparel first before extending them to other products. The company didn't release other details.

Last year, high levels of industrial toxins were found in Chinese exports, including toys and toothpaste.

Last month, melamine, a chemical used to make plastics and fertilizer, was found in infant formula to artificially boost nitrogen levels so it would appear to have a higher protein level. Four deaths have been linked to the chemical; about 54,000 babies grew sick from exposure to the chemical, which can cause kidney failure. Four infants died from it.

Earlier this week, about 600,000 Chinese-made cribs sold by Wal-Mart were recalled by Delta Enterprises of New York. The cribs had potentially hazardous spring-loaded safety pegs and were sold between January 2000 and January 2007.

The United Nations says China has no agency that provides reliable health and safety information to consumers. The task is now handled by several agencies and results in uneven enforcement.

Wal-Mart needs to move quickly, because no one will bargain away their children's health for marginally lower prices. The company has a number of clever new initiatives, including a plan to sell cars and stealthy new small-format stores, but seems a little slow on product safety.

Wal-Mart has been so profitable for so long that it's hard to imagine the company stumbling. But if it flubs this one, competitors Target (TGT) and Costco (COST) will happily scoop up its customers.

Lee Scott, president and CEO of Wal-Mart, said in a prepared statement that "Maintaining the trust of our customers -- today and in the future -- is tied hand-in-hand with improving the quality of our supplier factories and their products."

File that piece of unusual brilliance under: Well, duhhhhhh.
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