11 Aug 2014
In late July 2014, Chinese authorities accused a Shanghai subsidiary of U.S owned OSI Group of intentionally mixed and sold meat beyond its shelf life with fresh meat to fast food chains like McDonald’s, Pizza Hut and KFC.
China’s food safety agency has detained five employees, including the Shanghai quality control manager, due to unspecified illegal activities. Pizza Hut and KFC have now severed all ties with the OSI Group, while McDonald’s have ended business with the group in China, Hong Kong and Japan.
David McDonald, president and chief operating officer of OSI Group, said in a press conference that a “quality control centre” would be created in Shanghai, which would invest 10 million yuan (US$1.6 million) for food safety educational campaigns.
China is McDonald’s third largest market. Due to this expired meat scandal, a company spokeswoman said that business in China, Japan and certain other markets are “experiencing a significant negative impact to results”. Furthermore, global sales forecast for 2014 “is now at risk”.
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