McDonald's, OSI partnership ‘on hold’
|McDonald's has urged other suppliers to expand their supply capacity to meet demand in China.
OAK BROOK, Ill. – McDonald's Corp. suspended its partnership with OSI Group LLC, its largest supplier in China, pending results of an official investigation into OSI's subsidiary, Shanghai HUSI Food, according to news reports.
McDonald's has turned to other suppliers to meet the chain's demand for poultry and beef. The company is evaluating its relationship with OSI and has not ruled out replacing OSI permanently, according to news reports.
Food-safety authorities in China closed a meat-processing plant run by Shanghai HUSI Food after a television report showed workers picking up meat from the plant floor and mixing fresh meat with expired meat. Police in Shanghai detained five people for their alleged involvement in the scandal. In the wake of the scandal, Burger King Worldwide Inc. and Yum! Brands Inc., which operates KFC and Pizza Hut restaurants in China, already severed ties with OSI.
Sheldon Lavin, chairman, CEO and owner of OSI Group, issued an apology to the company's customers in China. The company launched its own investigation and implemented a management and structural shake-up for its operations in China, which were renamed OSI International China.