Food Fraud and Counterfeit Cotton

Although the label on Welspun’s cotton sheets said they contained cotton from Egypt, they did not.

Welspun, a US-based textile company, supplies cotton sheets labeled “100% Egyptian cotton” to large retailers, including Target and Walmart. In 2016, a Target internal investigation revealed that about 750,000 of Welspun’s sheets and pillowcases were made of inferior cotton from India.

Walmart severed ties with the supplier following a customer lawsuit over the sheets. The scandal cost Welspun, which at the time was making 45 million meters of cotton sheets a year (more than enough to circle the planet), a loss of $700 million in market value.

Complex supply chains make it more difficult for companies to manage every step in sourcing raw materials.

Welspun’s representatives say it did not know the cotton in its sheets wasn’t from Egypt. Either by accident or on purpose, a supplier must have mislabeled the cotton yarn it bought for Welspun. The cotton supply chain is highly complex. Each processing stage – from cleaning harvested cotton to making the final product – takes place in a different country and sometimes on a different...