Scandal Hits Papa John's, BK, Starbucks

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July 23, 2014

They stop using suspect meat from Shanghai company

The Chinese meat scandal expanded to three new major fast-food brands and one new nation on Tuesday, and more are expected to join the embarrassing fray.

Burger King, Starbucks and Papa John's all said they, too, have stopped using meat from the suspect supplier. In Japan, McDonald's confirmed some Chicken McNuggets were made with meat from the supplier, Husi Food.

At issue: A warning signal is flashing for fast-food brands in the world's biggest growth market. Food-safety concerns, taken very seriously by Chinese consumers, have now spread to the major American brands that many Chinese consumers presumed were above that. Suddenly, giants such as McDonald's, Yum Brands and Starbucks have to earn back the trust of consumers in a growth market where they can least afford image damage.

What to do at this critical juncture? "I think that all companies need to take an active role in regulating their supply chains," said Steven Addis, CEO of Addis, a brand-consulting firm. "McDonald's and Yum Brands in China should announce permanent food-safety procedures where all of their ingredients go through quality-control testing to assure the public of safety."

They stopped short of that on Tuesday. But in a conference call with analysts, McDonald's CEO Don Thompson said McDonald's is taking the allegations very seriously. "If those things are confirmed at a higher level, we will deal with that effectively, swiftly and appropriately," he said.

Thompson also noted, for the first time, that the supplier in question tried to fool McDonald's. While the company does audit its suppliers, Thompson said, "We do feel we were a bit deceived relative to one of these plants." He did not get more specific.

Chinese authorities expanded their investigation of the meat supplier, Shanghai company Husi Food. A day after Husi's food-processing plant in Shanghai was sealed by the China Food and Drug Administration, the agency said Tuesday that inspectors also will look at its facilities and meat sources in five provinces in central, eastern and southern China.

The scandal surrounding Husi Food, owned by OSI Group of Aurora, IL, has joined a string of safety scares in China over milk, medicines and other goods, which have left the public wary of dairies, restaurants and suppliers. Food-safety violations will be "severely punished," the food agency said on its website.

Starbucks was indirectly pulled into the meat scandal on Tuesday. It identified one product, the Chicken Apple Panini, sourced from one of its suppliers, which uses chicken provided by Husi Food, said Starbucks spokesman Jim Olson, in an e-mail. "This product was removed immediately from our shelves."

Burger King China suspended the sale of products from the Husi factory. "We have launched a full investigation into this matter," said a statement from global spokesman Alix Salyers. "Food quality and safety are the highest priority at all ... restaurants."

Over the weekend, Papa John's took "immediate steps" to remove products from the supplier, it said a statement. The meat was in beef and Italian sausage toppings in five stores in Shanghai, the company said.

In Japan, McDonald's said it stopped selling McNuggets at more than 1,300 outlets that used chicken supplied by Husi. It said the company had been supplying chicken to it since 2002.

Shanghai broadcaster Dragon TV reported Sunday that Husi repackaged old beef and chicken, put on new expiration dates and sold it to McDonald's, KFC and Pizza Hut restaurants. McDonald's and Yum Brands, which owns KFC and Pizza Hut, said they stopped using Husi meat.

In a statement, Husi said it was "appalled by the report" and would cooperate with the investigation. "Our company management believes this to be an isolated event, but takes full responsibility for the situation and will take appropriate actions swiftly and comprehensively."

Food and drug safety is a sensitive issue in China after scandals in the past decade in which infants, hospital patients and others have been killed or sickened by phony or adulterated milk powder, drugs and other goods.

Contributing: The Associated Press

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