China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan (updated)
22/07/2014 08:08
* Starbucks, Burger King, Dicos pull products from Shanghai
Husi
* McDonald's says some tainted meat used in McNuggets in
Japan
* Pizza chain Papa John's cuts ties with Shanghai Husi
* China watchdog orders spot checks on Husi clients, OSI
site inspections
(Adds McDonald's Japan share price)
By Adam Jourdan
SHANGHAI, July 22 (Reuters) - The latest food scandal in
China is spreading fast, dragging in U.S. coffee chain Starbucks
SBUX.O , Burger King Worldwide Inc BKW.N and others, as well
as McDonald's products as far away as Japan.
McDonald's Corp MCD.N and KFC's parent Yum Brands Inc
YUM.N apologised to Chinese customers on Monday after it
emerged that Shanghai Husi Food Co Ltd, a unit of U.S.-based OSI
Group LLC, had supplied expired meat to the two chains.
ID:nL4N0PW0AM
On Tuesday, Starbucks said some of its cafes previously sold
products containing chicken originally sourced from Shanghai
Husi, a firm that was shut down on Sunday by local regulators
after a TV report showed staff using expired meat and picking up
meat from the floor to add to the mix.
A Tokyo-based spokesman at McDonald's Holdings Co (Japan)
Ltd 2702.T said the company had sourced about a fifth of its
Chicken McNuggets from Shanghai Husi and had halted sales of the
product on Monday. Alternative supplies of chicken have been
found in Thailand and China, he added. The company's shares
briefly fell as much as 1.4 percent to a 15-month low before
closing down 0.4 percent.
China's food watchdog said it ordered regional offices to
carry out spot checks on all firms which had used Shanghai Husi
products, and would inspect all of parent OSI's sites around
China to see if enough has been done to ensure food safety. It
said the case could be handed over to the police.
The regulator's Shanghai branch said in a statement on
Tuesday it had demanded production, quality control and sales
records from OSI. It added it already ordered McDonald's to seal
over 4,500 boxes of suspected meat products and Yum's Pizza Hut
to seal over 500 boxes of beef.
Fast-food chain Burger King and Dicos, China's third-ranked
fast food chain owned by Ting Hsin International, said they
would remove Shanghai Husi food products from their outlets.
Pizza chain Papa John's International Inc PZZA.O said on its
Weibo blog that it had taken down all meat products supplied by
Shanghai Husi and cut ties with the supplier.
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VIDEO: China bloggers on food scandal http://reut.rs/Uk0zWx
VIDEO: Another food scare in China http://reut.rs/1jRBM8i
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FOOD SAFETY CONCERNS
Food safety is one of the top issues for Chinese consumers
after a scandal in 2008 where dairy products tainted with the
industrial chemical melamine led to the deaths of six infants
and made many thousands sick. Other food scandals have hit the
meat and dairy industries in recent years, and many Chinese look
to foreign brands as offering higher safety standards.
China is McDonald's third-biggest market by number of
restaurants and Yum's top market by revenue. McDonald's is due
to report quarterly earnings later on Tuesday.
The scare has stirred local consumers and become one of the
most discussed topics online among the country's influential
'netizens', with some users spreading long lists of firms
thought to be tarnished.
The incident highlights the difficulty in ensuring quality
and safety along the supply chain in China. Wal-Mart Stores Inc
WMT.N came under the spotlight early this year after a
supplier's donkey meat product was found to contain fox meat. It
also came under fire for selling expired duck meat in 2011.
Starbucks said on its Chinese microblog site that it had no
direct business relationship with Shanghai Husi, but that some
of its chicken acquired from another supplier had originally
come from Husi for its "Chicken Apple Sauce Panini" products.
This had been sold in 13 different provinces and major cities.
The company added that all the products had already been removed
from its shelves.
Burger King said in a Weibo statement posted late on Monday
that it had taken off its shelves all meat products supplied by
Shanghai Husi Food and had launched an investigation.
Dicos said it pulled all ham products supplied by Shanghai
Husi, and would stop serving its ham sandwich product for
breakfast. "We will continue to carry out a probe into Shanghai
Husi Food and its related firms, to understand whether or not it
followed national regulations," Dicos said in a statement.
Swedish furniture firm IKEA IKEA.UL , which has in-store
food outlets, said on Weibo that Shanghai Husi had previously
been a supplier, but had not provided the firm with products
since September last year. Domino's Pizza Inc DPZ.N and
Doctor's Associates Inc's Subway brand, which were named in
online reports as being supplied meat from Shanghai Husi, said
their outlets in China did not use meat products from the firm.
Yoshinoya-parent Hop Hing Group Holdings Ltd 0047.HK ,
Japanese convenience store FamilyMart Co Ltd 8028.T and
Chinese chain Wallace urged diners not to worry, and said they
did not currently use any products from Shanghai Husi.
(Additional reporting by Pete Sweeney, Shanghai Newsroom and
Teppei Kasai in TOKYO,; Editing by Kazunori Takada and Ian
Geoghegan)
((adam.jourdan@thomsonreuters.com)(+86 21 6104 1778)(Reuters
Messaging: adam.jourdan.thomsonreuters.com@reuters.net))
Keywords: CHINA FOOD/