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Walmart creates own supply chain for beef

US supermarket giant Walmart, the world’s largest food retailer, is working with cattle producers and processors to establish its own supply chain for angus beef and reduce the influence of food producers such as Tyson and Cargill, which hold significant power over the price of meat.

The group made the announcement shortly after it was reported that 10 US states are affected by an outbreak of E.coli.

“As clean labels, traceability and transparency become more and more important to customers, we’ve made plans to enter into the beef industry creating an unmatched system that allows us to deliver consistent quality and value,” said Scott Neal, a senior vice president of Walmart US.

“By enlisting a number of best-in-class companies to take part in the supply chain, we’ll be able to provide customers with unprecedented quality, provide transparency throughout the supply chain and leverage the learnings we gain across our business.

“Beef is an important purchase for our customer… it’s likely the most expensive item on their plate and they are treating themselves when they buy it. Creating this supply chain allows us to treat our customers by giving them unprecedented quality and transparency.”

A positive impact

Creekstone Farms, a US subsidiary of Japan’s Marubeni Corp, will process Black Angus cattle at its Arkansas City, Kansas, facility and expects to create 250 jobs. The initiative also will add more than 200 jobs in Georgia where Walmart owns a case-ready beef facility that will be run by local beef producer FPL Food.

“Walmart’s ever-growing command presence in retail paints an optimistic future, one that proves beneficial for many involved,” said Francois Leger, president and CEO of FPL Food. “In addition to FPL employees, this will provide many opportunities for the agriculture community to include farmers, ranchers and cattlemen alike. The positive impact will be felt by many.”

However, not all comments were positive. “Walmart’s investors should question the long-term viability of acquiring meat supply chains, given robust efforts to tax meat by global authorities and animal protection laws that will seriously threaten the profits of major producers,” wrote one analyst.

The company’s latest initiative follows its recently-launched green finance programme in partnership with HSBC.

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