More chains hit in fast food safety scandal

Regulator orders checks at all of tainted supplier's facilities nationwide

More parties have been implicated up and down China's fast food supply chain in a food safety scandal involving a US food processor, with an investigation into the scandal set to expand nationwide.

The China Food and Drug Administration announced Tuesday that it will launch a "thorough" probe into the scandal after Shanghai Husi Food Co, an affiliate of the Illinois-based food processing conglomerate OSI Group, came under investigation for selling expired meat to fast food giants in China, including McDonald's and KFC.

The administration also announced that it had required local authorities in Hebei, Shandong, Henan, Guangdong and Yunnan provinces to begin investigation of all facilities invested in by OSI Group. It also vowed to scrutinize meat sources and the process of food production in these factories.

Over 5,000 boxes of meat products from the company have been found to be illegally produced, while some 100 tons of products have been sealed by Tuesday, according to the Shanghai Municipal Food and Drug Administration. Nine companies, including Papa John's and 7-Eleven convenience stores, have been implicated.

According to a Monday report by Shanghai-based Dragon TV, many tons of expired meat were used in the company's products, with some more than eight months past their expiration date, while workers from the company lied to inspectors from McDonald's.

An initial investigation showed that the company's decision to use expired food materials came from senior managers, and this policy has been in place for years, according to a follow-up report by Dragon TV.

"The exposure of Husi's missteps may appear to be good news to other food providers, as they can grab market share [after] Husi's rejection by [fast] food chains. But it is more of a warning to authorities and to the public that mismanagement might be an industry-wide problem," Ma Wenfeng, an agribusiness analyst, told the Global Times. Ma added that the loss of faith in fast food chains in China may also affect the business of food providers.

Fast food restaurants in China have been found at fault for offenses ranging from overusing antibiotics in animal feed to pumping food with additives. According to a report by China Business News in 2005, McDonald's boasted of its standards for food production and transportation, but sealed its business deals with suppliers with handshakes rather than contracts.

While Chinese food chains have publicly sought to distance themselves from Shanghai Husi, Reuters reported that McDonald's in Japan sourced about a fifth of its McNuggets from Shanghai Husi, and had halted sales of the product on Monday. McDonald's shares briefly fell as much as 1.4 percent to a 15-month low before closing down 0.4 percent, while Yum! Brands, the parent company of KFC and Pizza Hut, saw its shares drop by 4.25 percent on Monday, equivalent to a drop in market cap value of nearly $1.5 billion.