Breaking News on Food Safety & Quality Control

News > Industry news


McDonald’s, KFC apologise in China’s latest food safety scare

Post a commentBy RJ Whitehead , 21-Jul-2014

McDonald’s, KFC apologise in China’s latest food safety scare

Allegations concerning the sale of expired meat by American-owned Shanghai Husi Food to the Chinese operations of McDonald’s, KFC and Pizza Hut have forced the fast food chains to suspend orders while the Shanghai Food and Drug Administration investigates.

An exposé over the weekend by the Chinese Dragon TV channel prompted the moves after it had claimed to witness Husi workers repackaging and selling chicken and beef that had exceeded its sell-by date.

According to the Xinhua, China’s official news agency, reporters who managed to enter Husi workshops said they saw clear evidence that stale beef and chicken were repackaged after processing to prolong their shelf life for a further year.

Fast food chains apologise

McDonald’s and Yum! Brands-owned KFC and Pizza Hut have each apologised to customers by issuing statements on the Weibo microblogging platform as the Shanghai food watchdog began its investigation.

"Food safety is the most important thing for McDonald's, and we always strictly abide by national laws and regulations and related standards to ensure consumers can enjoy our products at ease," McDonald's said in its statement.

For its part, Husi, which is owned by Illinois-based OSI Group, claims to have strict quality-control processes in place and has said it will co-operate fully with authorities.

OSI reported revenues of over US$5bn in 2012, with Husi supplying McDonald's in China since 1992 and Yum! since 2008, according to the company’s website.

Another setback

Yum!’s China operation, the biggest in the country’s burgeoning fast food market with a 5% share last year, according to research agency Euromonitor, accounts for around half of the transnational’s global revenue. 

However, alongside McDonald’s, its brands have faced fallout from high-profile supply-side scandals in recent years, most notably in 2012 when Shanghai authorities revealed that independent tests had found high levels of antibiotics in chicken supplied to Yum! and McDonald’s by Liuhe Group.

Yum! suffered a sharp drop in its profits following the last incident and has only recently managed to stabilise its balance sheet.

Analysts have been split over the potential impact of the Husi exposé on the fortunes of both chains, with Benjamin Cavender, Shanghai-based principal at China Market Research Group, telling Reuters that the situation will be challenging for both firms, and especially for Yum!.

"Yum had just started rebuilding credibility and had some decent sales news which just came out for the second quarter. I think this is going to really set them back," he said.

Learning from the past?

However, in a research paper quoted by Bloomberg, Mei He, Yaoxin Huang and Haiyan Guo of China International Capital, said the latest food-quality scandal would have “limited and transitory impact” on companies like KFC China.

Local management have learned painful lessons from 2012’s ’instant chicken’ scare will take immediate and forceful measures to contain any adverse publicity and close the loopholes in any quality-assurance procedures,” the analysts claimed.

Whatever the financial impact on multinational corporations, the affair is bound to provoke a strong reaction among consumers who are already tired of having to face regular food safety scandals.  

Food and drug safety was voted as the their third biggest concern this year, up from seventh place in 2013, according to an annual online poll of 3.3m respondents by the state-run People’s Daily in February.

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Key Industry Events


Access all events listing

Our events, Events from partners...