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McDonald’s, Yum Ordered to Reveal Suppliers Amid Shanghai Probe

Investigators from China FDA investigate Shanghai Husi Food Co., a factory of U.S. food provider OSI Group, in Shanghai. The city’s party secretary pledged to crack down on food safety violations and improve product quality. Source: STR/AFP/Getty Images
Investigators from China FDA investigate Shanghai Husi Food Co., a factory of U.S. food provider OSI Group, in Shanghai. The city’s party secretary pledged to crack down on food safety violations and improve product quality. Source: STR/AFP/Getty Images

Aug. 11 (Bloomberg) -- Shanghai has ordered McDonald’s Corp. and other foreign restaurant chains to disclose their product sources as the city seeks to regain consumer trust after a food scare sparked safety concerns in the country.

Yum! Brands Inc., Burger King Worldwide Inc., Carl’s Jr., Papa John’s International Inc. and Ting Hsin International Group’s Dicos were among companies asked to post supplier information on their website by the Shanghai Municipal Food and Drug Administration, according to a posting on the city’s official microblog.

Shanghai authorities required greater transparency after they ordered an investigation last month into a food supplier accused of selling expired meat, and as scandals such as fox meat sold as mutton have rocked the city in the last two years, raising fears of unsafe products in the country.

On July 20, a local television station aired an undercover report showing workers at Shanghai Husi Food Co., a unit of Aurora, Illinois-based OSI Group LLC, had been repackaging and giving chicken and beef that exceeded its sell-by dates another year. That prompted their customers such as McDonald’s and Yum’s KFC and Pizza Hut chains to pull products from the supplier, leading to a shortage of Big Macs and some other items in their restaurants.

Eateries are now asked to put up information such as supplier names, ingredients used in its products, and the results of food production checks on their official websites so they can be “put under consumer scrutiny,” according to the Aug. 9 posting.

McDonald’s has started restoring its full menu in some cities in China and some of its Beijing outlets will only get the full range of burgers this week due to logistical delays, the fast-food chain said in a statement today.

Shanghai, China’s financial capital, has been trying to improve openness in governance. Han Zheng, the city’s party secretary and its most senior leader, pledged to crack down on food safety violations and improve product quality.

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net Gregory Turk

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