Dairy giant Hanford Dairy announced Wednesday that it would close more to 2,000 stores in mainland China, and close at least 20 more in the next two months in Shanghai and Beijing.
Hanford Dairy is the biggest buyer of Chinese pork, cheese and beef products and has an operations base in China’s far western region of Inner Mongolia.
The announcement comes as the company has faced growing criticism over its handling of labor in China, including allegations that factory workers were denied overtime and pay.
Hanford has also faced scrutiny for labor conditions and other issues related to the production of dairy products, which the company claims it uses only for animal feed.
Hanning said in a statement Wednesday that the closures would impact more than 5,000 Hanford employees in China and around 1,400 in Shanghai, Xinhua news agency reported.
It said the closures were planned over the next five years and would be implemented from 2018.
In recent years, Hanford also has faced criticism over labor conditions at its facilities in Henan Province, where it makes its pigs.
Hanning said it will replace some of its labor force by workers from the neighboring province of Zhejiang.
The company has also been in discussions with several other countries, the company said.
The company’s announcement comes after China’s Central Board of Direct Taxes issued a warning on Wednesday that dairy prices could rise by as much as 25 percent this year and 2019 if global food prices remain at current levels.