In their statement, the retailer said their distributor, Dezhou Fujude Food Company Limited, had produced and provided to Wal-Mart China and other distributors donkey meat tainted with fox DNA. Wal-Mart reimbursed their customers who purchased the "five-spice" donkey meat.
Wal-Mart assured its customers it had immediately removed the suspect product from its shelves and was also cooperating with food safety authorities. The giant retailer also said they have a zero-tolerance policy for any contamination problems.
Wal-Mart china has stepped up its own internal food safety procedures and has started doing routine testing of DNA for products that are easily adultered, like beef, mutton, donkey and venison.
Suppliers will also be subject to additional inspection by a third party, with Wal-Mart saying they will report any companies suspected of fraud to the local authorities.
While Wal-Mart is the world's largest retailer, it has had a difficult time getting in on the ground-floor in China. It is already reportedly planning several store closures in 2014 because of under-profitability.
Food safety and contamination of many products has been an ongoing problem with many Chinese companies over the past few years. Earlier in 2013, a series of scares involving locally produced powdered infant formula caused consumers to turn to western baby formulas.
Wal-Mart has been working to break into China's one trillion dollar food and grocery market, and this incident could put a dent in the retailer's efforts to build an additional 110 stores over the next few years.