China regulators fine OSI Group $3.6M in 2014 meat scandal

HONG KONG – The Chinese units of a former meat supplier for McDonald’s and KFC China have been fined more than $3.6 million for selling expired meat in a fast food safety scandal that erupted two years ago.

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It’s the latest fallout for OSI Group after a Shanghai TV station reported in 2014 that the company repackaged old beef and chicken under fresher expiration dates.

In a notice posted on its website , the Shanghai Municipal Food and Drug Administration said Monday that district market regulators fined Shanghai Husi Food Co. about 17 million yuan ($2.5 million).

Husi parent OSI Group’s China office was hit with a separate fine of 7.3 million yuan ($1.1 million).
Husi and OSI will also face tighter scrutiny from the regulator, though specifics weren’t given.

No one answered the phone at OSI and Husi offices in China, where Monday was the start of a weeklong holiday. Calls to the regulator’s offices also went unanswered.

The penalties come after a Shanghai court’s ruling in February that two local units of Aurora, Illinois-based OSI sold the tainted meat and fined them a total of 2.4 million yuan. The court also sentenced 10 employees to prison, one of them Australian.

The company appealed the ruling, but the regulator’s notice said the appeal was rejected in July.

Food safety remains a concern for Chinese consumers despite promises from the government to step up enforcement. Other recent high-profile scares include tainted baby formula, fake meat and fruits and even seafood pumped with gelatin.

After the report by Shanghai’s Dragon TV aired, Husi customers in China including McDonald’s Corp., Yum Brands Inc.’s KFC and Pizza Hut restaurants and Burger King Corp. stopped using its products. The company was forced to lay off 340 workers and the chairman apologized.

Source Kelvin Chan, Henry Hou, The Associated Press