Chicago Sun-Times

Scandal over food in China

- BY SANDRA GUY Staff Reporter Email: sguy@suntimes.com Twitter: @sandraguy

The meat supplier at the center of China’s latest food scandal is a unit of Aurorabase­d OSI Group, a major beef and chicken supplier to McDonald’s.

1 The meat supplier at the center of China’s latest food scandal is a unit of Aurora-based OSI Group, a major beef and chicken supplier to McDonald’s restaurant­s.

OSI Group issued a statement Monday saying it has launched its own investigat­ion into a report on China’s Dragon TV that workers at its factory in Shanghai were caught on camera reprocessi­ng expired and discarded meat, including picking up meat off of the floor and mixing fresh meat with meat older than the expiration date.

“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,” according to the statement from the company founded in 1909 by the Otto family.

The company said its managers were “appalled” by the TV report and that it is cooperatin­g with inspectors.

McDonald’s Corp. and Yum Brands’ KFC and Pizza Hut restaurant­s said they switched to other suppliers, and noted that the unit of OSI Group served restaurant­s only in the Shanghai area. McDonald’s, headquarte­red in Oak Brook, said the incident affected 25 percent of its restaurant­s in China.

The OSI Group started as Otto & Sons, eventually becoming in the 1970s the largest Midwest supplier of ham- burgers to McDonald’s, according to an October 2013 report in Independen­t Processor magazine.

The company expanded under the leadership of billionair­e Sheldon Lavin, who transforme­d Otto & Sons into OSI Group, with 20,000 employees worldwide, $6.125 billion in 2013 revenue and more than 50 facilities in 17 countries, according to the magazine and an analysis by PrivCo business research.

The OSI Group website said the company has been supplying McDonald’s in China since 1992 and KFC and Yum Brands since 2008.

Lavin oversaw the company’s expansion into Taiwan and South America in the 1980s, followed by China, Australia, Japan, India, the Philippine­s and South Africa, according to the magazine report.

The PrivCo research report said OSI Group also supplies meat to other restaurant chains in China, but could not say whether they were affected by the scandal at the Shanghai Husi Food plant.

David McDonald, OSI Group president, was quoted in 2013 as saying, “There is no other place in the world growing as quickly as China, and we feel fortunate to be a part of it. We look at China as the number one growth effort among all of our global activities.”

 ?? | AP ?? A couple walks past a KFC restaurant in Beijing. Workers in a Shanghai supply factory, which once supplied KFC outlets in China, were shown on video reprocessi­ng expired meat.
| AP A couple walks past a KFC restaurant in Beijing. Workers in a Shanghai supply factory, which once supplied KFC outlets in China, were shown on video reprocessi­ng expired meat.

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