McDonald's boosts oversight of Chinese suppliers

Staff Writer
Columbus CEO

NEW YORK (AP) — McDonald's said it will monitor its suppliers in China more closely after a food-safety scandal in the country hurt the hamburger chain's sales and reputation.

The company said Tuesday it plans to increase audits and video monitoring at its suppliers and send more employees to meat production facilities to ensure its food is prepared safely. It also named a new food safety officer and created a hotline where employees can report poor food safety practices.

The changes come after a TV report in July showed workers at McDonald's supplier Shanghai Husi Food Co. repacking expired meat. McDonald's stopped using the Shanghai plant and many restaurants were unable to provide some products, including Big Macs and Chicken McNuggets.

McDonald's, based in Oak Brook, Illinois, reported a 7.3 percent drop in July sales at its restaurants in Asia, the Middle East and Africa.

Other fast-food companies have been hurt by food-safety concerns in China. Husi, which is owned by Aurora, Illinois-based OSI Group, was also accused in the TV report of selling expired meat to KFC. Yum Brands Inc.'s KFC also stopped using meat from the plant. After the TV report, OSI conducted an investigation and said that the plant did not meet its standards and would create a quality control center in Shanghai.

OSI declined to comment Tuesday.

Shares of McDonald's Corp. fell 92 cents to close at $92.80 Tuesday. Its shares are down 4.4 percent so far this year.