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 Shanghai's chief of police and deputy mayor Bai Shaokang told local
radio that the executives of Shanghai Husi Food, a unit of
U.S.-based OSI Group LLC, had been taken into custody, Xinhua news
agency said.
The firm had supplied meat to foreign fast food chains McDonald's
and KFC-parent Yum Brands Inc, among many others.
The scandal, which also dragged in coffee chain Starbucks Corp.O>,
was triggered by a local television report showing staff at Shanghai
Husi using long-expired meat. The report also alleged the firm
forged production dates.
Food safety has been a huge concern for Chinese consumers after
dairy products tainted with the industrial chemical melamine
sickened many thousands and led to the deaths of six infants in
2008.
Regulators closed the Shanghai Husi plant on July 20. Police have
detained five people, including Shanghai Husi's head and quality
manager. It was not clear from the Xinhua report if Bai was
referring to the same executives.
“If any wrongdoing was unearthed, we would deal with it strictly
according to law,” Bai was quoted as saying.
Yum Brands Inc is the biggest Western restaurant operator in China
with 6,400 restaurants. It warned last week that the scare caused
"significant, negative" damage to sales at KFC and Pizza Hut
restaurants in the period from July 20 through July 30.
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After the scandal broke, Yum quickly cut all ties with OSI, which
was not a significant supplier to the chain.
McDonald's Corp, which has deep ties to OSI and was more dependent
on the supplier, ended its relationship with OSI China. As a result,
many of its 2,000 restaurants in the country have suffered meat
shortages.
McDonald's Holdings Co Ltd, the Japanese unit of the world's biggest
restaurant chain, withdrew its earnings guidance for the year after
the scandal forced it to switch to alternative chicken supplies.
(Reporting By Norihiko Shirouzu and Ran Li in Beijing; Editing by
Lynne O'Donnell)
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