McDonald's, KFC hit by food scandal in China

A bucket of KFC Extra Crispy fried chicken is displayed in San Rafael, Calif. KFC.

McDonald’s and KFC's parent company Yum! Brands apologized to Chinese consumers over concerns that a supplier of theirs was selling expired chicken and beef to fast food chains.

Chinese regulators have shut down the supplier, Shanghai Husi Food Company, which is owned by OSI Group, an American food supplier based in Aurora, Illinois that has an annual revenue in the billions of dollars. The Shanghai supplier also provided food to Pizza Hut, Papa Johns, and Starbucks. 

Sunday evening, a local television news program in Shanghai aired a report that showed workers at the supplier’s plant repackaging chicken and beef products that had gone past their expiration dates. The report stated workers also hid crates of expired beef from inspectors sent by McDonald’s.

Foreign fast-food chains typically earn more trust among Chinese consumers who believe the chains will have better hygiene than local eateries, so the question Chinese consumers are asking now is: what about the rest of these brands’ suppliers?

"I think we will come to a point where the large brands – KFC, McDonald’s, Starbucks, and others – will have to start just like Nike and Apple did, showing who their suppliers are and releasing reports about the quality of each one," says Richard Brubaker, founder of Collective Responsibility, which helps multinational companies in China with corporate social responsibility.

Brubaker says all of the companies involved in this particular scandal will need to begin doing unannounced inspections at their suppliers in China, and they’ll have to be more transparent about their supply chains to regain the trust of not only Chinese consumers, but the trust of investors, too.  

 

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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