U.S. group overhauls China business in meat safety scandal

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U.S. group overhauls China business in meat safety scandalSHANGHAI – A leading U.S. meat supplier said on Monday a Chinese unit at center of a food safety scandal had issues were “absolutely inconsistent” with group’s high standards.

“This is my company and events like these have a personal … they simply don’t represent values I stand for or those of my company,” Sheldon Lavin, millionaire chairman, CEO and owner of Illinois-based OSI Group LLC told a news conference in Shanghai.

OSI said it was suspending at Shanghai Husi Food and would review all its China plants in a bid limit further damage after losing two major .

KFC and Pizza Hut parent Yum Brands Inc last week severed its ties with OSI, while Japan and Hong Kong units of McDonald’s Corp said they were ending their relationship with U.S. meat processor’s Chinese unit following allegations it mixed expired meat with fresh produce.

David McDonald, OSI’s president and operating officer, said the group was making management changes in China, and set up a quality control center in Shanghai better supervise its business. It also bring in global experts survey the China and improve auditing, including constant visual surveillance and extensive employee interviews.

In addition, it plans spend 10 million yuan ($1.62 million) on a food safety education program in Shanghai.

OSI, which ranks among the top few dozen U.S. private companies with annual of close to $6 , said its China had a certain amount of autonomy as the group wanted a decentralized business model allowed decisions to be made locally, although global standards were not meant to be broken. McDonald said the China operations would come under the direct control of headquarters.

Shanghai Husi Food was accused earlier this month by a TV documentary of mixing expired meat with fresh produce and forging production dates. Regulators in Shanghai said Husi had forged the dates on smoked beef patties and then sold them after they expired.

Police have detained five people as part of their . There have been no reports of any consumers falling sick. [eap_ad_2] “To date, we’ve found issues that are absolutely inconsistent with our internal requirements for the highest standards, processes and policies,” McDonald told a packed news conference at a Shanghai hotel, adding all nine OSI food processing plants in China would be reviewed.


China is McDonald’s third biggest market by outlets and Yum’s largest and is a big growth for foreign fast-food chains. But a series of damaging food safety scandals in recent years risks denting those prospects as many Chinese look to foreign restaurants for better quality.

McDonald’s, which has more than 2,000 outlets in mainland China, took more meat dishes off its menus on Monday as it sought to fill the supply gap after OSI withdrew all Shanghai Husi from the market at the weekend.

At least three McDonald’s outlets in Shanghai and Beijing, visited by Reuters reporters on Monday, had stopped selling all or most of their meat . Outlets in cities such as Tianjin and Wuhan were also hit, according to microblog postings.

A spokeswoman at McDonald’s in China said its beef, chicken and pork were affected at outlets across the country, though the level of impact varied. In an emailed statement, McDonald’s said it had withdrawn all from the Husi group in China since Friday. “As a result, we are now only offering a limited menu in our restaurants around the country.”

The company said some of its China restaurants would resume offering a full menu in early August, while may take a little longer.

“I wanted to order chicken products today,” said Tan Qiang, 23, at a McDonald’s in central Shanghai. “But they only had one type of combo and nothing else. I was disappointed not being able to eat what I want.” (Reuters)[eap_ad_3]