Shanghai Husi fed expired meat to KFC and McDonald's — 10 charged, $3.6M in fines

Shanghai Husi Food, a Shanghai unit of the US-based OSI Group, supplied processed meat to China's biggest Western fast-food chains — McDonald's, KFC and Pizza Hut among them. In May–June 2013, Yum Brands returned a batch that did not meet its standards and ended some orders. What followed, as the court later established, was not a correction: from March 2013 to July 2014 the company's Shanghai and Hebei plants produced and sold substandard food, passing it off as qualified product.

On 20 July 2014, a Shanghai TV station broadcast secretly filmed footage from inside the plant: workers using expired meat and altering production dates. Within days, McDonald's and Yum cut ties with Husi; other chains followed, and six OSI China employees were held for questioning. For a stretch, McDonald's China ran a reduced menu.

The case ended in two sets of penalties. In February 2016, Shanghai's Jiading district court convicted both Husi companies of producing and selling fake and inferior products — fines of ¥1.2 million each, with ten defendants receiving prison sentences, the ringleader receiving three years. In October 2016, the food regulators' administrative fines were upheld by the court: ¥24.3 million in total, about $3.6 million. OSI called the convictions unjust and appealed.