China Food Scandal: OSI Group Recalls Shanghai Husi-Made Meat, Brings In New Management Team

OSI Group LLC, the parent company of China’s Shanghai Husi Food that supplies meat to many global brands, said that it has recalled all products made by its Shanghai unit, which allegedly sold chicken and beef beyond the expiration date.

According to the Illinois-based OSI Group, the company’s latest move is aimed at rebuilding trust and cooperating with the ongoing investigation into the scandal that is feared to have tainted products sold by global chains, such as McDonald’s Corporation (NYSE:MCD), Yum! Brands Inc. (NYSE:YUM) and Starbucks Corporation (NASDAQ:SBUX). Last week, the Chinese government suspended operations at Shanghai Husi, following local media reports that the company was selling spoiled meat.

“These decisions are the most responsible course of action we can take at this point in time,” Brent Afman, a senior vice president and managing director of OSI's Asia Pacific, Middle East and Africa divisions, said in a statement. “We are committed to openness and transparency. We are providing clear and full explanations and findings to all concerned as early as possible.”

The company also said that it is conducting a “thorough internal investigation” into possible failures by former and current senior management at the Shanghai factory.

“Should any misconduct be uncovered, we will take swift and decisive action against those responsible, including all relevant disciplinary and/or legal measures. In addition, a new management team has been brought in to China to ensure that operations run effectively,” OSI said, on its Chinese website.

Last week, local authorities arrested five people, including the head of Shanghai Husi Food and its quality manager, as part of an investigation into the food scandal. There were quality lapses at a U.S.-based plant of OSI Group LLC too, International Business Times reported, citing a former employee.

Although no consumers have so far reported falling sick from consuming meat supplied by Shanghai Husi, long-time customers, such as McDonald and Yum! Brands, suspended orders from the supplier in the past week. Yum, the owner of KFC and Pizza Hut chains, also said that it would no longer do business with OSI in China, the U.S., and Australia.

“Today’s announcement from OSI Group does not affect McDonald’s as we had already stopped sourcing and serving product from Husi Shanghai upon learning of alleged food safety issues,” Heidi Barker, a McDonald’s spokeswoman, told Bloomberg via e-mail.