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updated: 7/28/2014 7:50 AM

Meat scare banishes most burgers in Shanghai

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  • If you want a burger from McDonald's Corp. in China's biggest cities, you'll have to get one made from fish.Beef, pork and chicken items were eliminated at the U.S.- based chain, after supplier OSI Group LLC recalled all products made at its Shanghai unit yesterday. Aurora,-based OSI, which supplies customers including McDonald's and KFC owner Yum! Brands Inc., is accused of repackaging old meat as new.

      If you want a burger from McDonald's Corp. in China's biggest cities, you'll have to get one made from fish.Beef, pork and chicken items were eliminated at the U.S.- based chain, after supplier OSI Group LLC recalled all products made at its Shanghai unit yesterday. Aurora,-based OSI, which supplies customers including McDonald's and KFC owner Yum! Brands Inc., is accused of repackaging old meat as new.
    Associated Press

 
Bloomberg News

If you want a burger from McDonald's Corp. in China's biggest cities, you'll have to get one made from fish.

Beef, pork and chicken items were eliminated at the U.S.- based chain, after supplier OSI Group LLC recalled all products made at its Shanghai unit yesterday. Aurora,-based OSI, which supplies customers including McDonald's and KFC owner Yum! Brands Inc., is accused of repackaging old meat as new.

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The scare is fueling concerns that China has yet to gain control over the safety of its food supply, despite years of government investigations and penalties. The latest episode, involving a foreign-owned company, suggests the problems affect even suppliers previously thought safe.

"We are now only offering a limited menu in our restaurants around the country," McDonald's China unit said in an e-mailed statement today.

Calls to McDonald's delivery dispatchers in Beijing and Shanghai today confirmed that fish burgers are the only sandwiches available.

Hong Kong McDonald's have pulled from their menus Chicken McNuggets, the McSpicy chicken filet, fresh corn cups, fresh iced fresh lemon, green salad and grilled chicken salad because those involved ingredients from closely held OSI's units in Guangzhou and Hebei, according to the restaurant's website.

'Inconsistent' Processes

OSI said it is folding the China unit into its global company after its investigation showed Shanghai Husi had failed to to maintain standards.

"Our investigations have found issues that are absolutely inconsistent with our internal requirements for the highest standards, processes and policies," David McDonald, OSI Group president, said at a briefing today in Shanghai. "Our China operations will now become a part of the OSI International umbrella, directly embedded into our corporate organization, rather than operating as a separate, decentralized entity."

OSI was "compelled to withdraw all products manufactured by Shanghai Husi" and replace its management team in China, the company said yesterday in a statement on its website. The company had 55 facilities in 16 countries as of last year, and was set to process about 300 million chickens a year in China, according to its website.

Repackaging Meat

Initially, concern focused on Shanghai Husi meat following a July 20 report on local TV showing workers repackaging and selling chicken and beef past their sell-by dates. The recall has now spread to all products made by the Shanghai unit, including beef and pork.

Chinese authorities have ordered Shanghai Husi's plant shut for allegedly selling expired products. The local police detained five people in connection with an investigation into the meat supplier, the Shanghai Municipal Food and Drug Administration said in a July 23 statement.

The U.S.-based food processor is recalling its Shanghai Husi products "to help rebuild the trust of our customers and consumers, as well as to cooperate with the official investigatory process," according to its statement yesterday.

New Team

OSI said it had brought a new management team into China to ensure operations were run "effectively." The foodmaker is also conducting an internal investigation into current and former senior management, it said in the same statement.

Shanghai's party secretary Han Zheng, the city's most senior leader, said authorities would be candid to the public about the investigation into Shanghai Husi. All companies that flouted the rules in Shanghai would be punished according to law, according to comments distributed by the local government, citing Han's words at a briefing.

Shanghai Husi changed production dates of some meat pies, the Shanghai Municipal Food and Drug Administration said. Almost 70 percent of the re-packaged pies had been sold, with the rest confiscated by the agency, it said in a statement on its website.

OSI, which is based about 25 miles (40 kilometers) from McDonald's headquarters in the Chicago suburbs, has previously apologized to its customers, calling the case an isolated incident.

To contact the reporter on this story: Bloomberg News in Shanghai at emailtvbloomberg.net To contact the editors responsible for this story: Dave McCombs at dmccombsbloomberg.net Brendan Scott

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