SHANGHAI — After a food scandal in China involving expired meat to make fast-food products, the American company that owns the plant where the actions were documented said Monday that the issues were "absolutely inconsistent" with the group's high standards.
The company, OSI Group, based in Aurora, Ill., said it was suspending operations at the plant, Shanghai Husi Food, and would review all its China plants in a bid to limit further damage after losing two major customers.
"This is my company and events like these have a personal toll," Sheldon Lavin, the OSI chief executive, said here at a crowded news conference. "They simply don't represent the values I stand for or those of my company."
KFC and Yum Brands last week severed ties with OSI, while the Japan and Hong Kong units of McDonald's said they were ending their relationship with the meat processor's Chinese unit after allegations it mixed expired meat with fresh produce.
McDonald's, which has more than 2,000 outlets in mainland China, took more meat dishes off its menus on Monday as it sought to fill the supply gap after OSI withdrew all Shanghai Husi products from the market over the weekend.
David McDonald, OSI's president and chief operating officer, said the group was making senior management changes in China and would 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.
In addition, it plans to spend 10 million yuan, or $1.62 million, on a food safety education program in Shanghai.
OSI said its China operations had a certain amount of autonomy, as the group wanted a decentralized business model that allowed decisions to be made locally, although global standards were not meant to be broken. Mr. McDonald said the China operations would come under the direct control of headquarters.
Shanghai Husi Food was accused this month in a TV documentary of mixing expired meat with fresh product 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 consumers falling sick.
"To date, we've found issues that are absolutely inconsistent with our internal requirements for the highest standards, processes and policies," Mr. McDonald said, adding that all nine OSI food processing plants in China would be reviewed.
China is McDonald's third biggest market by outlets and Yum's largest and is a big growth opportunity for foreign fast-food chains. But a series of damaging food safety scandals in recent years risks denting those prospects as many Chinese look to foreign restaurants for better quality.
A spokeswoman at McDonald's in China said its beef, chicken and pork products were affected at outlets across the country, though the level of impact varied. McDonald's said it had withdrawn all products from the Husi group in China since Friday. "As a result, we are now only offering a limited menu in our restaurants around the country," the company said.
On Monday, at least three McDonald's outlets in Shanghai and Beijing had stopped selling all or most of their meat products.
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