By Sarah Nassauer
Wal-Mart Stores Inc. is asking its meat and egg suppliers to
curb their use of antibiotics and offer animals more humane living
conditions, inching into a tricky supply issue as Americans press
for higher standards for what they eat.
The world's largest retailer is asking farmers who grow beef,
chicken, pork and other animals for its U.S. stores to limit their
use of antibiotics to sick animals and to never use antibiotics to
promote animal growth.
In addition, the company is asking suppliers to raise animals
with sufficient space for them to express "normal behaviors" and
"freedom from discomfort," among other animal welfare measures.
Kevin Gardner, a Wal-Mart spokesman, said that includes asking
suppliers to find solutions to animal welfare concerns around
battery cages, gestation crates and veal crates, small confined
areas used to raise many chickens, pigs and cows in the U.S.
today.
The new guidelines come months after McDonald's said it would
curtail use of antibiotics in its U.S. chicken and Tyson Foods
Inc., the largest U.S. meatpacker by sales, said it would phase out
use of human antibiotics in its U.S. chicken. Wal-Mart's new
guidelines aren't mandatory but will send ripples through the
industry regardless, as the company is the country's largest
grocer, with grocery accounting for 56% of the $288 billion in
Wal-Mart U.S.'s sales last year.
The guidelines will affect suppliers to U.S. Walmart and Sam's
Club stores. The company hopes to "work collaboratively with
suppliers on this topic," Mr. Gardner said.
Wal-Mart executives are working to improve the quality of fresh
meat and produce in an effort to strengthen operations in the U.S.,
which accounts for about 60% of the company's sales. Same-store
sales at Walmart U.S. rose 1.1% in the most recent quarter.
Concerns about the way animals are raised has become a powerful
issue among shoppers, who are increasingly willing to pay a premium
for foods they perceive as healthier, more humane or better for the
environment.
Overall egg sales are flat, but sales of more expensive eggs
that tout 'cage-free,' 'pasture raised' or similar attributes are
booming. Organic milk, sold at a premium to regular milk, has
become a staple for a wide swath of the American public--in large
part because parents want to avoid giving their children food
raised with the use of growth hormones and antibiotics, according
to research from the Organic Trade Association, which represents
the industry.
A survey done by Wal-Mart ahead of the change in policy found
that about 66% of shoppers would gravitate toward a retailer that
said it would ensure humane treatment of livestock.
For food producers, navigating shifting shopper habits and
retailer preferences on these issues has been complex. Some egg
farmers say they are grappling with what type of hen housing to
invest in to fit consumer, retailer and government preferences.
Many consumers say they would prefer eggs from hens not raised
in battery cages, often smaller than a sheet of office paper, the
most common housing method in the U.S. But raising hens in larger
cages or letting them roam free in an enclosed building--what's
known as "cage free"--is pricey. Some farmers worry demand will
shift back to the lowest priced options.
Animal rights organizations cheered Wal-Mart's announcement.
"Walmart's animal welfare announcement is game-changing progress"
from a retailer with the power to influence every step of the
supply chain, said Wayne Pacelle, chief executive of the Humane
Society of the United States. The organization said it hopes to see
a timeline put in place.
Widespread antibiotic use in animal production has raised alarm
bells as antibiotic-resistant infections in humans rise. In 2013,
the FDA recommended that antibiotics only be used in food-producing
animals to address their health needs, not to promote growth.
Wal-Mart has discussed antibiotic and animal welfare guideline
changes with suppliers for about a year, said Mr. Gardner, the
company spokesman. The company is also asking suppliers to publicly
share annual progress reports, their own animal welfare positions
and current animal antibiotic use.
"A lot of our suppliers have already made a lot of progress,"
Mr. Gardner said.
David Kesmodel contributed to this article.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
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