According to a Bloomberg report, restaurants who have been sourcing meat from a US-owned Chinese supplier would be subject to spot checks by the Chinese government following the shutdown of the supplier's unit due to allegations that it has been supplying expired meat. The customers of Shanghai Husi Food Co, who has been supplying meat to McDonald's Corp and Yum! Brands Inc, would be visited by Chinese inspectors in order to assess whether the supplier has breached their responsibilities to ensure the safety of food, the China Food and Drug Administration said in a statement on its website.
The nationwide spot checks was spurred by the suspension of operations at Shanghai Husi, which is a unit of Aurora, Illinois-based OSI Group. Shanghai Husi has been the subject of a report by the local Dragon TV channel, which aired on July 20, saying that its workers had been repackaging and selling chicken and meat products past their sell-by dates. The meat crisis would affect operations of McDonalds and other popular fast food chains like Yum's KFC and Pizza Hut, Papa John's International Inc and Burger King Worldwide Inc. The companies has since declared that it had removed the items it has purchased from Sanghai Husi, Bloomberg said.
Shanghai-based director James Button of Smithstreet, which advises companies on their China strategies, said, "You're going to see more pressure for restaurant players to take direct control of their supply chains. It's certainly going to make things difficult for brands in the short term and I would not be surprised at all if more problems are uncovered."
OSI Group has since released a statement and claimed that the case is an isolated statement. On the other hand, a quality manager at the shuttered factory said otherwise to Dragon TV researchers that company executives knew the practices done at Shanghai Husi, and even approved its use of expired ingredients for years.
According to the Chinese FDA, the case against Shanghai Husi would be handed to police if the company is suspected of committing crimes.
