Shanghai Husi Meat Probe: China Detains 5 Employees Of OSI Group Subsidiary

Authorities in China detained five individuals connected with Shanghai Husi Food Co Ltd., over allegations that the firm supplied expired or rotten meat to several foreign fast-food chains in China and Japan, Shanghai police said Wednesday.

Police also shut down the U.S.-owned company’s Shanghai processing plant, the Financial Times reported. The five detained employees reportedly include the OSI Group LLC subsidiary’s top official and its quality control manager, Shanghai police said on the Chinese social media platform Weibo on Wednesday.

Meanwhile, Gu Zhenghua, deputy director of the Shanghai Municipal Food and Drug Administration, told the Xinhua news agency that at least some of Shanghai Husi’s transgressions were indicative of company-wide behavior, rather than that of a few individuals.

“We found that some of the illegal conduct was not that of certain individuals but was an arrangement organized by the company,” he said.

OSI supplies meat to several American fast food chains, including Starbucks (NASDAQ: SBUX), McDonald’s (NYSE:MCD) and Yum! (NYSE:YUM), the latter two of which issued apologies to their customers in China on Monday, and announced that they would suspend purchases from the company pending a police investigation.

The Chinese government shut down Shanghai Husi after an undercover investigation by a local television station discovered that the plant was selling food that had passed its expiration date. The Shanghai Municipal Food and Drug Administration has since announced the seizure of more than 1,000 tons of meat products from OSI facilities in China, Reuters reports.

The Shanghai branch also supplied meat for about a fifth of the Chicken McNuggets sold by McDonald’s outlets in Japan. Investigators announced on Tuesday that they would inspect all eight of OSI’s processing plants in China, as well as Shanghai Husi’s clients, the Financial Times reported.