Dezhou Fujude Food Co. Ltd., a donkey-meat supplier in Jinan, was investigated for food safety and placed under criminal detention, officials said.
Donkey meat is considered a delicacy in China.
Walmart said in a statement Thursday it is considering legal action against the supplier.
"While this appears to be an isolated incident to select stores in China, our customers' trust is paramount for our business and we are deeply sorry for this incident," Walmart said.
"At Walmart, we take the issue of food fraud very seriously. To this end, Walmart China is going beyond what local law requires and is adding DNA tests to its sample tests of meat products to ensure high quality and safety of the products sold in Walmart stores," the statement said.