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Franchises / Franchise

Chinese Police Detain Five in Expired Meat Investigation

2 min read
Opinions expressed by Entrepreneur contributors are their own.

The pressure is on for the meat supplier that sold expired meat to fast-food chains in China.

Chinese police announced today that they had detained five people connected to Shanghai Husi Food Co., the meat supplier for chains including McDonald's, Yum Brands, Starbucks and Burger King, reports The Wall Street Journal. Shanghai Husi is owned by an American company, OSI Group.

Yesterday, the Shanghai Food and Drug Administration reported that the meat-supplier purposefully allowed the safety violations that permitted the expired meat to go to market.

Related: Disappointing Earnings Add to McDonald's Bad Week

The disgusting safety violations came to light following a July 20 report from Shanghai TV, in which a reporter went undercover for two months in Shanghai Husi's workshops. The reporter discovered widespread sale of expired meat by Shanghai Husi to fast-food chains in the area.

American fast-food chains, including McDonald's and Burger King, have reported that they were blindsided by Shanghai Husi's safety violations. Burger King, McDonalds, Yum Brands and Starbucks have all halted orders from the meat supplier.

Even if the chains didn't realize they were serving Chinese customers expired meat, the scandal could eat into their profits. McDonald's and Yum Brands have relied on the Chinese market as a huge driver of growth. When the Chinese customer has reason to doubt the safety of the chains' chicken – as it did last year due to concerns over the bird flu – it drags down the entire brand.

Related: McDonald's, KFC Embroiled in China Food Safety Scare 

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