Yum Brands takes OSI off the menu
Print Edition
YUM Brands Inc, owner of KFC and Pizza Hut, said yesterday that it had terminated its relationship with the US-based OSI Group following the Shanghai Husi food safety scandal.
And Burger King Worldwide Inc also announced that it would no longer buy products from OSI suppliers in China, where the hamburger chain has about 200 restaurants.
In an open letter to Chinese consumers, Yum said the company was reviewing its supply chain and seeking new methods to detect any misconduct by its suppliers.
It said it was considering asking suppliers to install extra surveillance cameras to fully cover their production facilities as well as strengthening scrutiny during unannounced visits.
Reuters quoted a spokeswoman for Burger King as saying: “As a precaution, we have decided that we will no longer source any products from Husi or any of its related entities throughout China.”
The US chain’s China outlets might experience some temporary menu item shortages as a result, Alix Salyers added.
Meanwhile in Guiyang, capital of southwest China’s Guizhou Province, food and drugs administration officials said they had discovered nearly 300 kilograms of meat products supplied by Shanghai Husi to six Pizza Hut restaurants in the city.
The administration said it had “held appointment talks” with Pizza Hut executives and ordered the problem products sealed, China National Radio reported yesterday.
The Husi scandal came to light when Shanghai Television reported on July 20 that the company had been mixing old meat with fresh cuts and lying to inspectors from fast food chain McDonald’s by keeping fake production logs.
Regulators closed the plant and police detained five people, including Shanghai Husi’s head and quality manager.
Earlier this week, Yum said in a filing to the US Securities and Exchange Commission that the incident “brought a significant, negative impact to same-store sales at both KFC and Pizza Hut in China over the past 10 days.”
Yum China, which began its relationship with Shanghai Husi in 2008, said the OSI-owned facility was not a major supplier to KFC and Pizza Hut restaurants in China and the termination would not have a serious effect on its operations.
But the scandal had “shaken consumer confidence and impacted brand usage and Yum Brands is outraged by the alleged illegal activity and the violations of Yum Brands’ standards,” it said. It apologized to customers over any concerns they might have over food safety.
Fast food chain McDonald’s has also stopped using raw material from OSI’s Chinese facilities.
Many menu items are no longer available in its restaurants on China’s mainland.
David McDonald, president and chief operating officer of the US-based OSI Group, told reporters earlier this week that a new management team for China would include expertise from its global operations “to ensure full compliance with the OSI Group’s standards for quality.”
He said the company had been shocked about what happened at Shanghai Husi.
“Why these things took place, by whom they took place and for what motives they took place, we simply can’t understand,” he told a press conference in the city.
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