The meat supplier at the center of China’s latest food scandal is a unit of Aurora-based OSI Group, a major beef and chicken supplier to McDonald’s restaurants.
OSI Group issued a statement Monday saying it has launched its own investigation into a report on China’s Dragon TV that workers at its factory in Shanghai were caught on camera reprocessing expired and discarded meat, including picking up meat off of the floor and mixing fresh meat with meat older than the expiration date.
“Our company management believes this to be an isolated event, but takes full responsibility for the situation and will take appropriate actions swiftly and comprehensively,” according to the statement from the company founded in 1909 by the Otto family.
The company said its managers were “appalled” by the TV report and that it is cooperating with inspectors.
McDonald’s Corp. and Yum Brands’ KFC and Pizza Hut restaurants said they switched to other suppliers and noted that the unit of OSI Group served restaurants only in the Shanghai area. McDonald’s, headquartered in Oak Brook, said the incident affected 25 percent of its restaurants in China.
The OSI Group started as Otto & Sons, eventually becoming in the 1970s the largest Midwest supplier of hamburgers to McDonald’s, according to an October 2013 report in Independent Processor magazine.
The company expanded under the leadership of billionaire Sheldon Lavin, who transformed Otto & Sons into OSI Group, with 20,000 employees worldwide, $6.125 billion in 2013 revenue and more than 50 facilities in 17 countries, according to the magazine and an analysis by PrivCo business research.
The OSI Group website said the company has been supplying McDonald’s in China since 1992 and KFC and Yum Brands since 2008.
Lavin oversaw the company’s expansion into Taiwan and South America in the 1980s, followed by China, Australia, Japan, India, the Philippines and South Africa, according to the magazine report.
The PrivCo research report said OSI Group also supplies meat to other restaurant chains in China, but it could not say whether they were affected by the scandal at the Shanghai Husi Food plant.
David McDonald, OSI Group president, was quoted in 2013 as saying, “There is no other place in the world growing as quickly as China, and we feel fortunate to be a part of it. We look at China as the number one growth effort among all of our global activities.”