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Chinese TV Report Prompts McDonald’s and KFC to Drop U.S.-Owned Supplier

China’s Dragon TV has thrust a Chicago-area meat supplier into the arms of its crisis communications team with public apologies and promises for quick corrective action. But Aurora, IL-based OSI Group could not act fast enough to stop McDonald’s and Yum! Brands Inc.’s KFC from cutting business ties with its Shanghai Husi Food Co. Ltd.

Late Sunday, the Shanghai Municipal Food and Drug Administration shut Shanghai Husi down.

Dragon TV’s aired report purportedly shows workers at Shanghai Husi picking up meat from the factory floor as well as mixing meat beyond its expiration date with fresh meat. Workers were also recorded as saying that customers would not buy the company’s products if they knew what was going on.

Both McDonald’s and KFC used Shanghai Husi as a meat supplier.

OSI, with a presence in 10 cities in China, issued a statement on its website saying that it was “appalled by the report” and promising to deal with the issue “directly and quickly.” It also noted that food safety is “the cornerstone of our company and our guiding principal.”

The company, formed more than a century ago as a Chicago meat market, promised to conduct its own investigation and to share results with the public.

The new food safety scare caused both McDonald’s and Yum! Brands to drop Shanghai as a meat supplier. Shanghai Husi Food Co. Ltd. is a major supplier to Shanghai-area restaurants, according to the two U.S.-based companies.

Yum! Brands said it will not tolerate any supplier violating government laws or regulations and that all of its KFCs and Pizza Hut restaurants in China were under orders to seal up and stop using any product from Shanghai Husi.

The practices show in the Dragon TV report “are completely unacceptable to McDonald’s anywhere in the world,” a spokesman said. McDonalds was supplied with chicken, beef and lettuce from Shanghai Husi. China is the fast-food chain’s third-largest market in the world.

The U.S. companies were on the rebound from recent food safety scandals, including 2012 disclosures about excessive antibiotic use by companies contracted to supply chicken.

Both New York Stock Exchange companies saw market declines on Monday, with Yum! shares down 3.5 percent to $74.72 and McDonald’s shares down 0.9 percent to $98.13.

© Food Safety News
  • overseaschinese

    If this was a locally-owned company, the senior management and owner(s) will be persecuted harshly. Question is, why are foreign companies taking advantage of the system? Or why is the government not persecuting them as they do to the local companies? Why should there be favouritism in the system to favour foreign companies to do what they want to do?

    To say that the the management or US parent company do not know about this happening is a clear farce to the HACCP or any food safety system they have in place. This goes out to any food safety issue of any company that can be directly related to the flaws of its current food safety system.

    I’d raise this issue as well to other McDonalds and KFCs around the world. Is it a common practise? If not, why is it allowed by management in China? For normal employee to add additives and flavours in the process outside of the management’s decision is VERY uncommon, especially in China.

    • overseaschinese

      Now that 6 senior management staff are persecuted, the next question would be, it’s effect towards HQ in US. How is it possible that HQ is not aware of this? Isn’t the production process and products according to the approved business operation?

  • S

    Nothing new.

  • S

    Doesn’t sound any different then what goes on in the USA food supply that’s consumed by USA people.

  • Oginikwe