A Shenzhen branch of US-based retail giant Wal-Mart Stores, Inc, is facing food safety allegations as a scandal involving a Shanghai meat supplier continues to simmer.

The Honghu Walmart store in Shenzhen, Guangdong province, was accused of selling food beyond its expiration date, reusing cooking oil and reselling rice that had been returned by customers, a local television station reported on Thursday.

The prepared food sold in the store was allegedly cooked in oil that had not been replaced for at least two weeks and sometimes as long as a month.

The store was also accused of selling chicken nuggets and marbled meat beyond their sell-by dates.

There were allegations that rice returned by customers, which may have been contaminated by insects, was not discarded, but used to make fast food.

A video was provided by a store employee who claimed his supervisor was trying to "control costs".

The case is under investigation by Shenzhen authorities.

"The on-site inspection didn't find they use expired meat products to prepare food products. We are now carrying out tests on their cooking oil, and the results will be out soon," a staffer from the local supervision department told a television station.

Wal-Mart China denied allegations in the report, adding that it had sent a cross-functional investigative team to the store.

The company told China Daily on Friday that "none of the alleged activities exists in the store".

The company said it has fully cooperated with local authorities to investigate the case, and it will deal seriously with any violation that is found.

Meanwhile, it will invite independent, third-party agencies to perform monthly surprise inspections, according to the statement.

A reporter from China Daily found that the Honghu Walmart store in Shenzhen continue to sell prepared food on Friday.

Last month, Shanghai Husi Food Co, owned by the US-based OSI Group, was accused by a Shanghai television station of using expired meat and forging production dates to extend shelf time. The company supplied food to a number of global brands, such as McDonald's, KFC, Pizza Hut and Starbucks.

Six senior executives of the company have been arrested by the Shanghai police.

The China Food and Drug Administration released a draft document this week inviting the public to provide information regarding any food safety concerns.

The draft requires food companies to withdraw substandard food products that present a serious threat to health as soon as they are discovered. Plans for recalls should be submitted to the authorities within 24 hours, it said.

Contact the writers at wanghongyi@chinadaily.com.cn and chenhong@chinadaily.com.cn

Wang Zhuoqiong contributed to the story.