The Chinese branches of fast-food chains McDonald’s Corp. (NYSE: MCD), KFC and Pizza Hut have suspended their local supplier after allegations that the Shanghai-based company was using expired meat for their products. For Kentucky-based Yum! Brands Inc. (NYSE: YUM), owner of KFC and Pizza Hut, this most recent scandal adds to a long list of problems in China.
McDonald’s and Yum have both announced that their China operations have stopped buying meat from Shanghai Husi Food Co., according to their respective microblog posts on Chinese social media on Sunday. Shanghai Husi Food which is owned by U.S. company OSI Group Inc., has been a longtime supplier of the two fast food chains. The Aurora, Illinois-based OSI Group told the Wall Street Journal that executives were "appalled" by reports and has put together an investigation into what the company believes is an "isolated event."
The statements were prompted by an investigative report by Shanghai-based news company Dragon TV. The report accused the company of altering the expiration date on its meat products sold to the international fast-food chains, as evidenced by an email allegedly sent to employees asking then to extend the expiration date of 10 tons of frozen beef. Both restaurant chains apologized to consumers, adding that there would likely be shortages of some specific products.
Yum said that Husi meat was only supplied to branches in the southern province of Fujian, and also specifically identified its sausage and egg sandwich and its "spicy roasted burger" as two products that will affected by the expired-meat allegations. A local Chinese fast-food chain, Dicos, has also taken its selection of breakfast sandwiches off the menu.
KFC, which is the most popular international fast-food joint in the country, seemed to be unaffected by the reports the following day. According to Chinese news source iFeng, KFC and McDonald’s outlets were still brimming with customers at lunch time on Monday. One customer, going only by his last name Wang, was unfazed by the claims. Wang told reporters that he had not heard of accusations, and he would continue to eat there in the future. Another customer by the last name Lei, who said he dines at McDonald’s frequently for lunch, said that he had heard about the chain using expired food but that since food safety problems are so prevalent in China, McDonald’s is at least more trustworthy than other many other restaurants.
On Chinese social media platform Weibo, however, the KFC and McDonald’s scandal was in the top four trending topics, and the conversation was less forgiving.
“Is this what improved food safety standards are supposed to look like?” one blogger said, in reference to China’s newest efforts to improve overall food safety regulations which were announced last month.
“Did we really need another reason not to eat fast food? How disgusting,” another blogger said.
“This is a shame because both business are quite successful and popular in China, but even with great business practice you must have a safe product,” another user wrote.
“KFC seems to have many lives, how many scandals can it survive?" asked another one.
In the past, KFC in China has suffered from separate supplier issues. Aside from a market skittish about chicken products as a result of the recent bird flu scares, the company’s local chicken supplier was investigated after its products were found to have high levels of antibiotics.