OSI overhauls China business after meat safety scandal

August 1, 2014

According to Reuters, OSI Group LLC, a U.S.-based meat supplier, has suspended operations at its Chinese subsidiary—Shanghai Husi Food—after a food safety scandal emerged in July. Sheldon Lavin, Chairman, CEO, and owner of OSI Group, said the company would review all its China plants in a bid to limit further damage after losing two major customers.

KFC and Pizza Hut parent Yum Brands Inc. has severed its ties with OSI, while the Japan and Hong Kong units of McDonald’s Corp. said they were ending their relationship with the U.S. meat processor’s Chinese unit following allegations it mixed expired meat with fresh product.

In addition, the company will be making senior management changes in China, and will set up a quality control center in Shanghai to better supervise its business. It will also bring in global experts to survey the China operations and improve auditing, including constant visual surveillance and extensive employee interviews. Finally, it also plans to spend $1.62 million on a food safety education program in Shanghai.

Shanghai Husi Food was accused in July by a TV documentary of mixing expired meat with fresh and forging production dates. Regulators in Shanghai said Husi had forged the dates on smoked beef patties and then sold them after they expired. Police have detained five people as part of their investigation. There have been no reports of any illness related to these acts.

Reuters article

OSI statement (pdf)