McDonald’s says China meat scandal hurting sales

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McDonald’s said Monday a scandal over a meat supplier in China is hurting sales in the region and its global sales forecast for 2014 is “at risk.”

The world’s biggest hamburger chain said in a regulatory filing that there’s been “significant negative impact” in China, Japan and other affected markets. These regions make up about 10 percent of McDonald’s Corp.’s revenue.

The Oak Brook company had previously said it expected the worldwide sales measure to be “relatively flat” for the year.

Meanwhile, the company’s signature Big Mac and Chicken McNuggets are returning to menus at restaurants in China two weeks after the food scandal erupted.

Beef and chicken items will be restored in Beijing and Guangzhou this week and in Shanghai by the end of the month, Reuters reports. The Oak Brook fast-food giant has more than 2,000 restaurants in China.

McDonald’s and other U.S. fast-food companies got caught up in a food-safety scandal when a Shanghai plant owned by Aurora-based OSI Group was accused of reprocessing expired meats and distributing it to restaurant chains.

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The fast-food giant removed its meat and chicken items July 28 after supplier OSI Group recalled products made at its Shanghai Husi plant. OSI Group has acknowledged problems at its Husi plant and pledged to fix them.

“What happened at Husi Shanghai is completely unacceptable. I will not try and defend it or explain it. It was terribly wrong, and I am appalled that it ever happened in the company that I own,” chairman and CEO Sheldon Lavin said in a post on the company’s website.

“On behalf of Husi and OSI, I sincerely apologize to all of our customers in China. We will bear the responsibility of these missteps, and will make sure that they never happen again.”

Additionally, OSI Group confirmed Monday that six employees of Shanghai Husi have been detained by Chinese authorities as part of a government investigation into the company.

“Throughout this investigatory process, we have been and will continue to provide our complete cooperation to all authorities involved,” the company said.

OSI also has launched a review of its manufacturing plants throughout China.


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