Chinese Prosecutors Charge 10 in Connection to Selling Expired Meat
September 30 2015 - 9:10PM
Dow Jones News
Chinese prosecutors charged 10 people connected with Shanghai
Husi Food Co., a unit of U.S.-based OSI Group LLC, more than a year
after authorities accused it of selling expired products to fast
food companies in China.
Courts in Shanghai brought charges of selling substandard
products against 10 people connected with two OSI meat-processing
facilities in Shanghai and in China's northern Hebei province, the
Shanghai People's Procuratorate said in a statement on its website
late Wednesday in China. A processing manager for OSI China was
among those charged.
Aurora, Ill.-based OSI, a top supplier to McDonald's Corp. and
other fast-food chains around the world, "will address the charges
according to legal procedures," a spokeswoman said. She added that
"we have confidence in China's legal system and believe that the
judicial authority will come to a fair and reasonable judgment with
full respect to the facts and laws."
Chinese authorities in July 2014 suspended operations for
Shanghai Husi, which, at the time of the scandal, was one of the
biggest suppliers in the country by volume for chains including
McDonald's and Yum Brands Inc.'s KFC. Authorities had accused OSI's
Chinese unit of intentionally selling expired meat following a
local television report alleging the practice.
The Shanghai Food and Drug Administration launched an
investigation into OSI's practices and six Shanghai Husi employees
were arrested a month later. The employees have been held for the
past year without charges. It is unclear which employees had been
arrested or if any have legal representation.
The authorities did not outline the details of its
investigation. Earlier this year, the Shanghai Food and Drug
Administration destroyed batches of what it called "questionable
products" that it recalled from the OSI division Shanghai Husi.
Closely held OSI said in a statement at the time that it is
disappointed in the agency's actions and that it doesn't want the
disposal to be seen as an admission of food-safety problems.
Sheldon Lavin, chief executive and owner of OSI, apologized last
year to Chinese consumers for the problems and said he would focus
on overhauling the company's China business, with an emphasis on
quality assurance. "It was terribly wrong, and I am appalled that
it ever happened in the company that I own," he said at the
time.
McDonald's, OSI's largest customer, halted the meat vendor's
supply to its 2,000-plus restaurants across the country after the
incident, as did Yum Brands.
The episode dealt a significant blow to the reputation of OSI
and was a major setback to its ambitions in China, where it had
invested $750 million over two decades in a bid to become one of
the country's biggest meat producers.
An OSI spokeswoman earlier this year said the scandal had cost
the company hundreds of millions of dollars in lost revenue in
China.
Ken Petersen, OSI's senior vice president of quality assurance
and regulatory affairs, said last week at an industry event in
China that OSI has remained committed to the country. "Our motto of
'In China, for China' hasn't changed," he said.
Write to Laurie Burkitt at laurie.burkitt@wsj.com and Jacob
Bunge at jacob.bunge@wsj.com
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(END) Dow Jones Newswires
September 30, 2015 20:55 ET (00:55 GMT)
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