Food scandal drags in global giants in Japan

SHANGHAI - Reuters

Workers produce food at Shanghai Husi Food, a factory of US food provider OSI Group in Shanghai. AFP photo

The latest food scandal in China is spreading fast, dragging in U.S. coffee chain Starbucks, Burger King Worldwide and others, as well as McDonald’s products as far away as Japan.

McDonald’s and KFC’s parent Yum Brands apologized to Chinese customers on July 21 after it emerged that Shanghai Husi Food, a unit of U.S.-based OSI Group, had supplied expired meat to the two chains.

On July 22, Starbucks said some of its cafes previously sold products containing chicken originally sourced from Shanghai Husi, a firm that was shut down on July 20 by local regulators after a TV report showed staff using expired meat and picking up meat from the floor to add to the mix.

A Tokyo-based spokesman at McDonald’s Holdings (Japan) said the company had sourced about a fifth of its Chicken McNuggets from Shanghai Husi and had halted sales of the product on July 21. Alternative supplies of chicken have been found in Thailand and China, he added. The company’s shares briefly fell as much as 1.4 percent to a 15-month low before closing down 0.4 percent.

China’s food watchdog said it ordered regional offices to carry out spot checks on all firms which had used Shanghai Husi products, and would inspect all of parent OSI’s sites around China to see if enough has been done to ensure food safety. It said the case could be handed over to the police.

The regulator’s Shanghai branch said in a statement yesterday it had demanded production, quality control and sales records from OSI. It added it already ordered

McDonald’s to seal over 4,500 boxes of suspected meat products and Yum’s Pizza Hut to seal over 500 boxes of beef.

Fast-food chain Burger King and Dicos, China’s third-ranked fast food chain owned by Ting Hsin International, said they would remove Shanghai Husi food products from their outlets. Pizza chain Papa John’s International said on its Weibo blog that it had taken down all meat products supplied by Shanghai Husi and cut ties with the supplier.

Safety concerns

Food safety is one of the top issues for Chinese consumers after a scandal in 2008 where dairy products tainted with the industrial chemical melamine led to the deaths of six infants and made many thousands sick. Other food scandals have hit the meat and dairy industries in recent years, and many Chinese look to foreign brands as offering higher safety standards. 

The scare has stirred local consumers and become one of the most discussed topics online among the country’s influential “netizens,” with some users spreading long lists of firms thought to be tarnished.  The incident also highlights the difficulty in ensuring quality and safety along the supply chain in China.