The viral peach crisp selling 20 10,000 units monthly led to consumers finding 3 metal crowns in the product. Sam's Club removed it from shelves for 24 hours before quietly relisting it, while regulatory authorities have yet to release their findings. While this incident appears to be a food safety headline, it actually exposes quality control blind spots inherent in the "retailer + brand custom supply" model—a critical issue every procurement professional must address.
On 7 25, a consumer in Dalian ordered Luxihe Nut Walnut Cookies via the Sam's Club app. Two days later, upon taking a bite of the last cookie, they sensed something was wrong and spat it out to find 3 metal crowns embedded with natural tooth fragments.
This peach crisp is no ordinary treat. A custom edition exclusively supplied by Luxihe to Sam's Club, it comes in individual packaging and has sold over 20 million units monthly, ranking 4 on Sam's "Best-Selling Biscuits & Pastries" list. Each customer is limited to purchasing 10 units at a price of 48.9. Despite being such a hit, a quality control issue occurred.
After the incident gained traction, Sam's Club reacted swiftly, removing the product on the morning of 7/29. But how swift was that? It was back on shelves by the afternoon of 7/30, in less than 24 hours. With regulatory investigations still ongoing, no traceability results released, no batch screening publicized, and no rectification plan announced—the product was simply put back on sale first.
Sam's Club's "Strictly Selected" reputation was undermined by its own private-label suppliers.
First, a fact many overlook: the problematic sesame cookies were not part of Luxihe's standard product line. They were a custom-made version exclusively for Sam's Club. This item is not sold at Luxihe's official online store or physical locations; Taobao customer service confirmed it as "channel-exclusive."
This is awkward. The Sam's Club mini-program states: "We select only one in a thousand with high standards, maintain strict quality control and continuous spot checks, ensuring every layer of oversight so members can shop with confidence." Consumers pay 260 in annual fees for this endorsement. Yet the custom product failed, turning "strictly selected" into an ironic joke.
Luxihe does have a quality control system. Customer service stated that the factory holds FSSC22000 food safety management certification and "metal detection systems are installed at multiple production nodes." Yet, 3 metal crowns passed through these checks and ended up in consumers' mouths. Either there were blind spots in the equipment, or execution fell short—there is a clear gap between the inspection process and its actual effectiveness.
More unsettling is that this isn't Sam's Club's first food safety misstep. In 3, its popular "Organic Freeze-Dried Strawberries" were found to contain pesticide residues and heavy metals exceeding limits. That same month, controversies over salmon standards and falsified traceability dates for black pork surfaced. On 6 15, the State Administration for Market Regulation summoned Walmart China (Sam's Club's parent company), citing recurring food safety issues across both offline stores and online platforms. Just 45 days after the meeting, the "fake tooth incident" involving walnut pastries emerged.
Sam's Club China's sales hit 2025 billion in 1400, with paid memberships exceeding 1070 million. While scale is growing, quality control is slipping. The gap between speed and quality is widening with each safety incident.
Who's really to blame when things go wrong?
Sam's approach was all too familiar: delist, compensate, and wait for the heat to die down.
This is the same situation as before. In the first round, we proposed a return and refund plus 500 yuan in compensation, which the consumer rejected. In the second round, we increased the offer to 1000 yuan, but it was still rejected. During the third round of communication, Sam requested to take possession of the dental crowns, but the consumer directly refused—handing over the physical evidence would eliminate our basis for tracing the issue and pursuing further rights protection.
Consumers' demands are clear: identify the source of foreign matter in the same batch, publish the full traceability process, assess hygiene risks, arrange medical checkups for family members, and disclose the brand's self-inspection and corrective action results. They seek truth and accountability—not 1000 yuan.
But Sam's seemed to misunderstand. The product was relisted just 24 hours after being pulled, with no official statement released and no explanation for why sales resumed before the investigation concluded. Previously, when Little Freddie's low-sugar pies were removed due to sweetness concerns and EarthGrown berries were found to contain PFAS, Sam's immediate response was an emergency recall—then what? Nothing followed. It seems like taking products off shelves is treated as the final step, as if removing them erases all responsibility.
Legally, this doesn't hold up. The Food Safety Law clearly states that both food operators and producers bear primary responsibility for food safety. As the seller, Sam's Club has a statutory obligation to verify incoming goods and ensure quality control. While it's true that Luxihe produced the product, Sam's selected it, inspected it, placed it on shelves, and collected membership fees—responsibility along this chain cannot be shifted away.
Let's look at Luxihe. On the Black Cat Complaints platform, there are already 309 complaints related to Luxihe, with foreign objects in food being a major issue. In the comments section, users report finding hair, bones, meat shreds, stones, and even nails in their food. What does this indicate? Quality control issues are not isolated incidents; they are cumulative. A brand that took 2024 years to expand to 500 stores, secured over 100 million yuan in funding just last 5, and is now aiming for "a presence in 100 cities with 10,000 stores," has grown its footprint faster than its quality control capabilities could keep up.
Industry analysts note that expanding from direct operations to franchising and adding private-label supply for Sam's Club has stretched the supply chain and management scope, posing severe challenges to consistent quality control. Logically, the highest risk lies in freshly made products at company-owned versus franchise stores. Yet this time, the theoretically most rigorously controlled Sam's Club exclusive items failed. This isn't an isolated incident—it points to systemic management gaps.
Quality Control Red Lines for Procurement: Five Non-Negotiables
Ultimately, this incident serves as a wake-up call for all supermarket buyers. Whether it's co-branding or custom products, quality control standards must be clearly defined and explicitly written into contracts. The following five points are recommended for procurement teams to review against their supplier management processes.
📌 Quality Control Red Line Checklist
- Qualifications aren't just about certificates; they're about execution.FSSC 22000, HACCP, and BRCGS are entry requirements, not a get-out-of-jail-free card. Since 2024, Sam's Club has accepted only semi-notified or unannounced audits starting in 8—this direction is correct. Scheduled audits give suppliers time to "cram" for the inspection; surprise factory audits reveal the true state of operations. Auditors should be able to trace a raw material batch back to its corresponding purchase order and inspection records within 15 minutes. If they can't, the traceability system is just on paper.
- Metal detection is not a formality; verify calibration records.Lixi He states that "metal detection systems are installed at multiple production nodes," yet 3 crown caps passed through. The purchaser does not want a generic assurance of equipment; they require specific details including equipment model, calibration frequency, alarm thresholds, and post-alarm response procedures. Are there continuous monitoring records for critical process steps? Is the sampling frequency sufficient? These requirements must be explicitly included in the acceptance criteria.
- Batch traceability must be fully operational, not just a concept on paper.The first step after an incident is to trace the batch: which factory, production line, shift, raw material lot, and where the inspection report is located. After Sam's Club removed this item, it was back on shelves in 24 hours—but without releasing the batch investigation results. This is the core of public concern. Procurement contracts must stipulate that suppliers provide a complete batch traceability report within a specified timeframe after a quality control incident; failure to do so constitutes a breach of contract.
- Complaint data is a more accurate quality control indicator than factory audit reports.Hei Mao Complaints and the complaint volume, type distribution on 12315 are publicly available data—more authentic than any factory audit report. Luxihe has 309 complaints, with foreign object incidents being a major hotspot. If purchasers had reviewed this data before sourcing, would they still list it as a custom supplier? We recommend establishing a supplier complaint monitoring mechanism: regularly pull data, set threshold limits, and trigger re-audits when thresholds are exceeded.
- Joint contracts must clearly specify the exit mechanism.What happens when a quality control red line is triggered? How long until removal? Who handles recalls? How are penalties calculated? Who fronts consumer compensation first? These issues shouldn't wait until problems arise. Sam's recent handling exposed a lack of exit mechanisms—products were pulled quickly and relisted just as fast, with no standardized process in between. Defining clear exit protocols in contracts is far better than dealing with disputes after the fact.
In short, co-branded products and custom supply are key strategies for supermarkets to build a competitive edge—a sound approach. However, this advantage hinges on maintaining rigorous quality control. As the number of suppliers, custom SKUs, and product variety increases, so does the complexity of oversight, expanding the risk of management blind spots. Yuan Shuai, Deputy Director of the Investment Department at the China Urban Development Research Institute, puts it plainly: "Different suppliers operate under varying production standards and management capabilities. Without a standardized supervision mechanism covering the entire production process across all suppliers, relying solely on spot checks upon warehousing will inevitably leave regulatory gaps."
Incoming inspection is the final line of defense, not the only one. True end-to-end quality control starts at production, extends through shipping, and reaches after-sales support.
Don't just talk quality on paper—visit factories in person. From 8 to 21, the SuperSourcing Hangzhou Exhibition is held at the China National Convention Center, bringing source manufacturers together. Buyers can visit booths to inspect products, verify credentials, discuss quality standards, and negotiate terms. Whether it's sesame cookies, grains and oils, or alcoholic beverages, verifying your suppliers before selection beats disputes afterward. Booths are limited—secure yours early.