News

New KFC, McDonald's chicken supply chain scandal surfaces in China

July 21, 2014

Yum! Brands and McDonald’s have halted orders from a meat supplier in Shanghai, China, after a TV station investigated sales of expired products. The Xinhua News Agency’s report showed workers at the Husi Food Co. picking up meat from the floor and mixing expired meat with fresh meat.

Allegations also include workers repackaging stale beef and chicken and marking new expiration dates.

According to the Associated Press, both restaurant companies immediately stopped using meat from the company after the report surfaced, and apologized to customers. Chinese officials ordered Husi Food Co. to suspend operations for investigations.

The news surfaces as KFC China continues to rebound from a major chicken supply chain crisis last year that caused sales to plunge by double digits. In March, the company initiated a rebranding effort to expedite recovery. During last week’s earnings call, Yum! Brands’ CEO David Novak said the brand was on the right path, turning in a 21-percent same-store sales increase during Q2.

KFC has more than 4,000 restaurants in China, with plans to open 700 more by the end of this year.

Husi is owned by OSI Group of Aurora, Ill.