Share

McDonald's feels 'deceived' by China meat audit

McDONALD's feels "a bit deceived" by the audit it received for Shanghai Husi Food, a China supplier that was shut down this week after a TV report showed workers mishandling meat, CEO Don Thompson said on Tuesday.

"We are no longer serving product from the primary facility there that has the challenges and the issues," Thompson said on a conference call after McDonald's reported lower-than-expected quarterly earnings.

The Shanghai Food and Drug Administration on Sunday halted operations of Shanghai Husi following a Dragon TV report that showed workers picking up meat from a factory floor, as well as mixing fresh meat with meat beyond its expiration date.

The scandal also has ensnared other Shanghai Husi customers, including KFC parent Yum Brands and Burger King Worldwide.

Many US restaurant operators and retailers rely on third-party auditors to check whether their suppliers comply with food safety rules and other regulations. It is not uncommon for suppliers at the centre of food safety scandals to have received high marks on their audits.

McDonald's did not immediately comment on the timing of the Shanghai Husi audit or the name of the auditing firm that visited the now-controversial plant.

Shanghai Husi, a unit of Illinois-based OSI Group, has supplied those McDonald's China restaurants since the early 1990s, a US spokesperson for the fast-food company said on Tuesday.

China is McDonald's third-biggest market as measured by the number of restaurants.

"I know there's a couple other facilities that they had that have been cleared now by the Chinese government," Thompson said, without elaborating.

It was not immediately clear whether McDonald's had stopped sourcing products from those other facilities.

OSI, which previously said it believed the Shanghai Husi incident to be an "isolated event", did not have an immediate response to the comments by the McDonald's CEO.

A US spokesperson for McDonald's on Monday said Shanghai Husi provided McDonald's with chicken, beef and lettuce, and that the facility shown in the television report primarily supplied McDonald's in Shanghai.

A Tokyo-based spokesperson at McDonald's Holdings (Japan) said the company had sourced about a fifth of its Chicken McNuggets from Shanghai Husi and had halted sales of the product on Monday. Alternative chicken supplies were found in Thailand and China, he added.

McDonald's and OSI are known in the industry for having a long relationship. OSI's chairperson and chief executive, Sheldon Lavin, is a member of the board of trustees for the Ronald McDonald's House Charities.

McDonald's said it is thoroughly investigating the Shanghai Husi matter.

If the problems were the result of "a higher level decision that has caused us to have a breach relative to consumer trust, we will deal with that effectively, swiftly, and appropriately", CEO Thompson said.

McDonald's shares were down 1.3% at $96.27 at the close of the market.



We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.96
-0.1%
Rand - Pound
24.12
-0.0%
Rand - Euro
20.62
-0.2%
Rand - Aus dollar
12.40
+0.2%
Rand - Yen
0.13
+0.3%
Platinum
911.84
-1.3%
Palladium
1,018.92
-4.4%
Gold
2,161.91
+0.1%
Silver
25.15
+0.5%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,430
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders