Huang Juan used to buy her daily necessities from a small market near her home. It was a typical neighbourhood market in Beijing run by private dealers selling their products at much cheaper prices than the large grocery chains.

Times have changed, however, and now Huang buys everything from big supermarkets such as Lotus Supercentre.

"The quality of the food is more reliable in supermarkets than in those smaller neighbourhood markets," she says.

Increasing numbers of urban Chinese consumers are choosing to pay more for the safety and quality that chain supermarkets can offer.

A report on food safety in the retail sector by the Ministry of Commerce last November shows over 80 per cent of urban consumers believe food safety and quality is better managed in supermarkets than in wholesale or small food markets. About 50 per cent of the respondents say they will now only buy food from large grocery stores.

Consumers are often frustrated by news reports, however, such as the recent claim that vegetables sold in one supermarket in Northeast China were not subject to government tests. This particular grocer buys its vegetables from local farmers, packages them with "green food" tags, and then directly sells them in the supermarket.

"In many supermarkets, the section selling fresh produce is often rented out to suppliers," says Gao Jingsheng, vice general manager of Bejing Jingkelong Co Ltd.

Supermarkets usually conduct strict quality assessments before they sign supply contracts, but it is difficult for these companies to exert daily control over product quality once suppliers start operating in their outlets, Gao says. This is why Jingkelong terminated contracts with all of its fresh food suppliers last year.

The Beijing-based chain spent more than 100 million yuan (US$12.3 million) to build a logistics centre for fresh products outside the capital city's East Fourth Ring Road. The new centre features strict quality control systems and includes a lab to conduct tests on food.

"If the sample quality is not up to national or industrial standards, we reject those products," Gao says.

Gao adds that the logistics centre includes a 2,400-square metre fruit and vegetable distribution plant and a meat processing plant. The fruit and vegetable facility can clean and package 40 tons of food per day, and has a warehouse that can store 450 to 480 tons of fruit and vegetables at a constant temperature.

The meat processing plant is able to process 250 pigs a day.

"Third-phase construction is still ongoing. We are also planning a processing plant to provide a broader range of foods for consumers," Gao says.

The new logistic centre also started supplying fruit, vegetables and meat products to all 44 Jingkelong supermarkets throughout Beijing in December.

Product quality also needs to be controlled through suppliers, Gao says. The company has collaborated with Yanhe Fruit and Vegetable Planting Co-operation on the construction of a vegetable planting base in Beijing's Shunyi District.

It has also established a supply partnership with Beijing No 5 Meat Plant and several reliable fruit growers throughout the country.

These strong relationships with suppliers help guarantee food quality and safety, agrees Hu Dinghuan, researcher from the Chinese Academy of Agricultural Sciences.

Several other supermarkets have established similar supply relationships. French retailer Carrefour, for example, has an agreement with Sanfeng Fruit Co in East China's Shandong Province. The company supplies apples to Carrefour and offers technical guidance to more than 8,000 growers. It provides them with subsidies and requires that they only use high-quality pesticides.

"We can trace every single product, so if there are any problems, we can identify them immediately," says Wang Xiaozhong, a public relations manager for Carrefour China.

Carrefour's quality system includes more than 10 different products.

"We will add more in the future," Wang says.

Carrefour also has quick test facilities in most of its hypermarkets to ensure the quality of other fresh foods.

"We can't test packaged products, but we do as much as possible with the fresh products," he adds.

Industry analysts say better management in the fresh food sector helps improve retail competitiveness, as increasing numbers of Chinese consumers turn to supermarkets for their daily needs. Gao says sales in one-third of Jingkelong's stores went up dramatically after the new logistics centre was established.

(China Daily 03/13/2006 page5)