September 22, 2006 2:18 p.m. EDT

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Wal-Mart to Pressure Suppliers
To Reduce Packaging by 5%

Wal-Mart Stores Inc. said it plans to cut packaging by 5% under a new environmental commitment announced at the Clinton Global Initiative in New York.

The world's largest retailer said Friday it is launching a program to pressure its 60,000 suppliers to reduce the amount of packaging they use, while making the rest more environmentally friendly. Wal-Mart expects the plan would cut out 5% of its packaging world-wide and said that plan could save billions of dollars in costs. Wal-Mart will begin scoring suppliers' efforts in 2008.

Wal-Mart Chief Executive H. Lee Scott said in a statement: "Even small changes to packaging have a significant ripple effect. Improved packaging means less waste, fewer materials used, and savings on transportation, manufacturing, shipping and storage."

WAL-MART STATEMENT

 

Read the full text¹ of Wal-Mart's statement on the discount retailer's environmental initiative to reduce packaging.

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The move marks one of several high-profile announcements at the Clinton conference. On Thursday, British billionaire Sir Richard Branson said he plans to invest $3 billion in technologies to help combat global warming. Sir Richard said the money will come from 100% of the profits and other proceeds of his Virgin Group transportation businesses. (See related article.⁴)

The Wal-Mart announcement also marks the second move by the retail giant in as many days. Wal-Mart waded into the nation's health-care debate and its rivals' pharmacy businesses on Thursday by promising to cut the price of some of its generic drugs to $4 for a 30-day supply. (See related article.⁵)

In that effort, the Bentonville, Ark. retailer said it will use its purchasing and distribution prowess to offer versions of about 150 different generic drugs, such as the antibiotic tetracycline, at prices on average 20% below its existing ones. The drugs are mostly older medications; the company said it plans to add more popular drugs later on. Wal-Mart implemented the price policy at 65 stores in the Tampa, Fla. area, and early next year will expand it to about 170 other Florida stores before taking the policy nationwide later next year.

The drug announcement drew politicians to a Tampa Wal-Mart where Florida Gov. Jeb Bush praised the local price drop as "good corporate citizenship," and U.S. Sen. Bill Nelson lauded it as "a pretty darn good deal for consumers."

Critics called the effort "marketing spin" and pointed to what they characterized as Wal-Mart's less-than-generous employee health-care policies, in which employees bear a big share of the costs. Partly as a result, many Wal-Mart workers don't even sign up for insurance.

Write to the Online Journal's editors at newseditors@wsj.com⁶