China Fast Food Chains Release Supplier Information

McDonald’s and other fast-food chains operating in China have published details of their suppliers on their Chinese websites, in response to a request from the authorities after a food safety scare.

The Shanghai Municipal Food and Drug Administration said that it had asked McDonald’s, Burger King, Dicos, Carl’s Jr. and Yum Brands, owner of KFC fried chicken and Pizza Hut, to publish the confidential information as part of the government’s initiative to strengthen oversight of food suppliers.

The five companies were among those that used meat from Shanghai Husi Food, a unit of OSI Group, which is based in the US. Husi was reported to have improperly handled meat and to have used expired food. The Shanghai authorities said that the companies published the information on 9 August.

Yum’s suppliers include subsidiaries of the WH Group and China Yurun Food, and McDonald’s milk suppliers include Beijing Sanyuan Foods and Kowloon Dairy. A Shandong meat unit in which China’s state-backed Cofco Corporation owns shares supplies Yum and Burger King, the lists showed.

Benjamin Cavender, a Shanghai-based analyst at China Market Research Group, said that food chains were typically reluctant to publish supplier lists as they do not want competitors to know from where they source their food.

“In this case, it’s probably smart for the companies to do this because they want to send a clear message that they are being transparent, both to the government and to their consumers,” he was quoted by
the New York Times
as saying.

“But in reality, for the situation to truly get better, there’s going to have to be stricter oversight directly over the suppliers, and that cannot just be coming from the brands; it also has to come as well from the government.”

The food scare involving Shanghai Husi Food is testing Chinese consumers’ loyalty. Yum said this month that the scare had a ‘significant, negative’ effect on sales at KFC and Pizza Hut across the country. McDonald’s said on 8 August that the China food scandal could mean that its 2014 global sales target falls short.

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