Husi Food Co's Shanghai and Hebei branches, which were found to have supplied products with substandard meat to fast food chains, were fined 1.2 million yuan ($182,000) each by a Shanghai court on Monday.
The two branches, which were accused by Shanghai Jiading District People's Court of producing and selling counterfeit products, were former suppliers to restaurants and fast food chains across the country, including McDonald's, KFC, Pizza Hut and Starbucks. Husi was a subsidiary of US-based global food processor OSI Group.
The court also said that Yang Liqun, general manager of the deep processing division of OSI Group and an Australian citizen, was sentenced to three years in prison, fined 100,000 yuan and ordered to be deported.
Nine other people, including He Yezheng, operations director of the division that Yang worked for, were sentenced to prison terms ranging from 19 months to 32 months and fined between 30,000 and 80,000 yuan.
The incident came to light in July 2014 after a local news program, following a reporter's two-month undercover investigation, revealed that the Shanghai branch of Husi provided products tainted with reprocessed and expired meat to clients. Shanghai's food quality watchdog investigated the factory and immediately found problems.
Based on investigations, the court found that from March 2013 to July 2014, the two Husi branches had products returned and orders terminated by the Shanghai branch of Yum Brands, the owner of Pizza Hut and KFC restaurant chains, because the products failed to meet requirements.
However, in a bid to diminish economic losses, several managers, including Yang and He, decided to order the staff to repackage the products or use them as raw materials for several batches of new products. This resulted in the substandard food products flowing into the market.
For example, the court found that in June 2014, the staff, instructed by Yang and He and organized by other people who were subsequently punished, reprocessed a batch of frozen steaks that were already past their expiration date. The staff then marked a new production date on the packages, along with a guarantee period of 365 days, and sold them to clients.
