China orders nationwide spot check on restaurants over meat sourced from Shanghai Husi Food Co

China has ordered nationwide spot checks on restaurants sourcing meat from a US-owned Chinese supplier to McDonald's Corp and Yum! Brands Inc, following the closure of the unit, which was shut for allegedly selling expired products, Bloomberg reported.

Chinese inspectors would conduct ''thorough spot checks'' to assess if there had been a breach by Shanghai Husi Food Co of  their responsibilities to ensure food safety, such as checking food purchases and accompanying certificates and invoices, China Food and Drug Administration said in a statement on its website (See: Shanghai FDA shuts down meat supplier to McDonald's, KFC)

Operations at Shanghai Husi, a unit of Aurora, Illinois-based OSI Group, were shut following the local Dragon TV channel reporting on 20 July that its workers repackaged and sold chicken and beef past the sell-by date. The probe would cover fast food chains such as McDonald's, Yum's KFC and Pizza Hut, Papa John's International Inc and Burger King Worldwide Inc, which said they had bought and had since removed items from the supplier.

Bloomberg quoted James Button, Shanghai-based director of Smithstreet, which advises companies on their China strategies as saying there would be more pressure on restaurants to take direct control of their supply chains. He added, it would certainly make things difficult for brands in the short term.

Meanwhile the latest food scandal in China has  dragged in US coffee chain Starbucks, Burger King Worldwide Inc and others, as also McDonald's products as far away as Japan.

McDonald's Corp and KFC's parent Yum Brands Inc apologised to Chinese customers yesterday over supply of expired meat by Shanghai Husi Food Co Ltd, a unit of US-based OSI Group LLC, to the two chains.

Starbucks said today, that some its cafes had earlier sold products containing chicken originally sourced from Shanghai Husi, a firm that was shut down on Sunday by local regulators following a TV report that showed staff using expired meat and picking up meat from the floor to add to the mix.

According to a Tokyo-based spokesman at McDonald's Holdings Co (Japan) Ltd, the company had sourced about a fifth of its Chicken McNuggets from Shanghai Husi and had halted sales of the product on Monday. He added, alternative supplies of chicken had been found in Thailand and China. The company's shares were down briefly 1.4 percent to a 15-month low before closing down 0.4 per cent.

China's food watchdog said it ordered regional offices to carry out spot checks on all firms which had used Shanghai Husi products, and would inspect all of parent OSI's sites around China to see if enough has been done to ensure food safety. It said the case could be handed over to the police.

Food safety continues to be a problem in China.   Share prices for Yum! last year were down during an outbreak of bird flu in China.