Shanghai court fines OSI units, jails employees for expired meat

A court in Shanghai said two China-based units of Aurora-based meat supplier OSI Group LLC have been found guilty of selling out-of-date products and fined 1.2 million yuan ($182,000) each, while 10 employees were given jail sentences.

There was "ample evidence" that Shanghai and Hebei Husi Foods Ltd., as well as the 10 employees, intentionally passed off disqualified products as being acceptable, the Jiading district court said in a statement on its official microblog.

OSI's Shanghai-based spokeswoman Ding Ying said the company will issue a statement if available.

The court concluded the trial on Dec. 30, more than a year after a Chinese TV channel reported Husi workers were repackaging and selling expired chicken and beef. The ensuing outcry prompted fast-food chains in China and Japan, including McDonald's and Yum-owned KFC, to halt food supplies from the Chinese units of OSI.

Yang Liqun, an Australian citizen who was a general manager of OSI in China, was given the heaviest sentence of three years in jail, a 100,000 yuan fine, and will be deported, the statement said. The other nine were sentenced to jail terms of between 19 months to 32 months, with four of them given reprieves, according to the court.

The Shanghai Jiading court said that in 2013 and 2014, the two units found themselves with an oversupply of products due to customers returning and canceling orders which were not up to standard. Yang and the others decided to repackage the meat and sell it to other customers to avoid losses, said the court.

The court cited several examples of the companies' transgressions, including an instance in March 2013 where Hubei Husi workers repackaged beef steaks that was previously defrosted and treated, stamping new 180-day "best before" dates on them before they were sold to other customers, said the court.

Workers were also directed to cut up expired beef steaks into smaller pieces, and then packaged with new sell-by dates. Other products similarly repackaged included meat pies, and chicken breasts that made their way into McDonald's burgers, said the court.