McDonald's breaks ties with meat supplier

McDonald's announced Monday it had halted cooperation with all affiliates of food supplier OSI's China branches on Friday, the move coming as OSI's CEO apologized again after being revealed to have supplied expired food.

"The incident was completely unacceptable ... I apologize sincerely," said Sheldon Lavin, CEO of OSI Group, at a press conference in Shanghai on Monday.

The CEO announced that the company's Chinese operation team would be restructured and incorporated into the international management team.

Facing supply shortages of certain products in some outlets, McDonald's has been trying to source chicken products from other suppliers, it said in a statement released Monday.

The rice-based menu and hamburgers are unavailable in many McDonald's outlets in Beijing, Tianjin and Shandong Province, with only French fries and beverages being sold, the China News Service reported.

Shanghai Husi Food, an OSI subsidiary which has been at the center of the scandal, said that the problems revealed in the internal investigation failed to meet the company's own standards relating to production processes, according to a statement issued at the press conference.

OSI is cooperating with the Shanghai Food and Drug Administration (SFDA) and found violations of its own quality standards, yicai.com reported.

OSI will set up an Asian Quality Control Center in Shanghai to boost quality assurances for all of its China branches, and invest 10 million yuan ($1.6 million) to launch a three-year food safety education campaign, the statement added.

The company pleaded ignorance as to why their Shanghai unit committed these actions and who was responsible, the Chief Operating Officer of OSI admitted at the conference.

Avoiding answering questions about the compensation for consumers and the responsibility OSI Group will shoulder, he restated that the company was taking measures to investigate the issue quickly and effectively and restoring the truth would be top priority for them, according to eastday.com.

A new leadership team in China has been appointed, consisting of experts from all over the world, the statement said. OSI will hold a thorough investigation into all plants in China to ensure that other plants meet its standards.

The SFDA confirmed Saturday that Shanghai Husi falsified production dates on 4,396 crates of beef patties that expired in February with 3,030 crates being sold. Shanghai police detained five people from Husi and put them under investigation, the Xinhua News Agency reported Wednesday. The food scandal also spread to Hong Kong and Japan.

Hong Kong has suspended imports from all of OSI's Husi branches in the Chinese mainland since Thursday and products that have already been imported will be sealed up.

McDonald's Japan also decided to stop importing all chicken products produced in China after a supplier in Shanghai admitting using rotten meat, local media reported Friday.