UPDATE 1-Wal-Mart price pressure hurts China workers-report

(Updates with Wal-Mart statement)

BEIJING, Nov 25 (Reuters) - Wal-Mart Stores Inc's (WMT.N: Quote, Profile, Research) demand for rock-bottom prices from suppliers in China means some of these companies are forcing their employees to work in sweatshop-like conditions, a new report said on Wednesday.

China Labour Watch said Wal-Mart, which also operates more than 250 stores in China, is failing to pick up on such abuses when it carries out audits of certain suppliers, calling into doubt pledges to source ethically.

"As the world's largest retailer, Wal-Mart leverages its massive product orders to purchase goods at low prices, and workers suffer the financial burden," China Labour Watch, a New York-based rights group, said.

Wal-Mart said it launched an investigation into the five factories referenced in the report after learning of the allegations.

"We take reports like this very seriously, and we will take prompt remedial action if our investigations confirm any of the alleged findings," according to a statement from Wal-Mart spokesman Richard Coyle.

Wal-Mart, the world's largest retailer and with more than 60,000 suppliers worldwide, procures billions of dollars worth of goods directly from China every year.

The company said last year that it would enforce stricter quality and environmental standards for its army of Chinese suppliers. [ID:nSP410622]

But in some factories run by Wal-Mart suppliers, China Labour Watch found pay was withheld to workers who did not meet production targets, and employees who were given only poor quality food or accommodation.