China investigates supplier accused of selling expired meat to McDonald's, KFC

A Chinese man poses for photos with Ronald McDonald at a McDonald's in Shenyang, China on Sat., May 21, 2011. (AP / Ng Han Guan)

BEIJING -- China's food safety agency on Tuesday announced a nationwide inspection of processing factories and meat suppliers used by a company accused of selling expired beef and chicken to McDonald's and KFC.

The weekend report by a Shanghai TV station that Husi Food Co. repackaged old meat added to a string of food safety scares in China that have left the public wary of dairies, restaurants and other suppliers. McDonald's, KFC and a third restaurant chain, Taiwanese-owned Dicos, said they immediately stopped using meat supplied by Husi.

In addition to Husi's facility in Shanghai, inspectors will look at processing sites and meat sources in five other provinces in central, eastern and southern China, the China Food and Drug Administration announced. On Monday, the agency said it sealed Husi's plant in Shanghai and told customers to hold suspect products for testing.

Violations will be "severely punished," the agency said on its website.

Dragon TV reported Sunday that Husi, owned by OSI Group of Aurora, Illinois, repackaged old beef and chicken and put new expiration dates on them. It said they were sold to McDonald's, KFC and Pizza Hut restaurants.

In a statement, Husi said it was "appalled by the report" and would co-operate with the investigation. It promised to share the results with the public.

"Our company management believes this to be an isolated event, but takes full responsibility for the situation and will take appropriate actions swiftly and comprehensively," the statement said.

Food and drug safety is an unusually sensitive issue in China following scandals over the past decade in which infants, hospital patients and others have been killed or sickened by phoney or adulterated milk powder, drugs and other goods.

Foreign fast food brands are seen as more reliable than Chinese competitors, though local brands have made big improvements in quality.

McDonald's Corp., based in Oak Brook, Illinois, and Louisville, Kentucky-based Yum Brands Inc., which owns KFC and Pizza Hut, said they also were conducting their own investigations.

"If confirmed, the practices outlined in the report are completely unacceptable to McDonald's," said McDonald's in a statement.

Yum's KFC is China's biggest restaurant chain, with more than 4,000 outlets and plans to open 700 more this year. The company, based in Louisville, Kentucky, said in a statement that "food safety is the most important priority for us. We will not tolerate any violations of government laws and regulations from our suppliers."

KFC was badly hurt after state television reported in December 2013 that some poultry suppliers violated rules on drug use in chickens. Yum said KFC sales in China plunged 37 per cent the following month. KFC overhauled quality controls and eliminated more than 1,000 small poultry producers from its supply network.

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Associated Press researcher Fu Ting in Shanghai contributed to this report.