Weak Links in China’s Food Chain

When McDonald’s opened its first restaurant in China in the early 1990s, it did not turn to local suppliers for meat, which most likely would have been cheaper. Instead, it relied on its longtime partner the OSI Group, which had been linked to the fast-food titan ever since Ray Kroc, the McDonald’s founder, in the 1950s tapped the Chicago butcher Otto & Sons to provide consistent, reliable meats to his expanding empire.

 OSI is caught up in a messy, very public food safety scandal in China. A television station there broadcast a program in late July accusing employees in its Shanghai plant of doctoring labels to extend expiration dates on chicken and beef products and showing workers scooping up meat that had fallen on the ground and putting it back on conveyor belts for processing.

OSI said in a statement that what had happened at the Shanghai facility was “terribly wrong” and “completely unacceptable.” The company has reassigned executives in its China operations and started an investigation into the matter. It has also promised to bolster its systems. OSI has reached out to Arrowsight to help improve its processes in China.

We will bear the responsibility of these missteps and will make sure that they never happen again,” OSI said. The company declined to comment further.

The average Chinese factory worker comes from someplace where food has likely been scarce and picking up a piece of meat that has dropped on the floor and eating would not be unusual — it’s not unusual for us to drop food on the floor and anyway eat it,” said Andy Tsay, a professor of operations management at Santa Clara University who was one of the authors of a paper on recalls of Chinese made products in 2007.