Bloomberg News

Japan Blocks Imports From China Firm as Meat Scare Widens

July 23, 2014

Shanghai Husi Food Factory

Workers sort food nuggets at the Shanghai Husi Food Co. factory in Shanghai on July 20, 2014. Source: AFP/Getty Images

Japan suspended food imports from a U.S.-owned Chinese meat-processor accused of selling products past their expiration dates as FamilyMart Co. (8028) joined McDonald’s Corp. (MCD:US) in pulling affected items from its Japanese outlets.

Japan will strengthen safety checks on food entering the country, Chief Cabinet Secretary Yoshihide Suga said yesterday. The government hasn’t received any reports of illness resulting from the products made by Shanghai Husi Food Co., a unit of Aurora, Illinois-based OSI Group, according to Suga.

“We want to make sure that questionable food won’t come into Japan by strengthening our checks system and taking measures for food safety for our people,” Suga said. “It is extremely important to grasp the facts. Especially this time, it’s about passing due dates. So it’s not about poison or anything illegal.”

The chief secretary’s remarks followed a FamilyMart statement July 22 in which the Tokyo-based convenience store operator said it had halted sales of chicken nuggets made from Shanghai Husi products. FamilyMart is one of the latest Asian food retailers forced to withdraw items after a Chinese television channel reported July 20 workers at Shanghai Husi repackaged and sold chicken and beef past the sell-by-date.

Shanghai police have detained five people in connection with an investigation into the meat supplier, the official Xinhua News Agency reported yesterday.

Toxic Dumplings

Shanghai’s Food and Drug Administration sealed off 100 tons of products from customers of Shanghai Husi, Xinhua reported. Checks on the company also showed expired meat was involved in the production of more than 5,100 boxes of nuggets, meat patties and small beef steaks in June, according to the news report.

Six years ago, at least nine people in Japan fell ill after eating poisoned dumplings imported from a food factory in China’s Hebei province, causing a nationwide health scare in Japan and straining relations between the two neighbors. A former worker at the factory was sentenced to life in prison after pleading guilty to doctoring the products.

Seiichiro Samejima, an analyst at Ichiyoshi Research Institute Inc., said the latest allegations may slow Japanese imports of Chinese food products in the coming weeks.

“Some Japanese consumers will shy away from chicken for a while,” Samejima said by phone. “The impact won’t be as severe as when the poisonous dumplings became a big scandal before as there are no health problems reported so far.”

7-Eleven

Shanghai Husi started supplying FamilyMart with chicken products this month, Akiko Tsuse, a spokeswoman at the Japanese retailer, said by phone. FamilyMart sold two food items using Shanghai Husi’s meat in Japan, with one of the products selling in 10,000 stores, the company said.

Seven & I Holdings Co. (3382), the Japanese company that owns the 7-Eleven brand, said the operator of its convenience stores in Shanghai had stopped selling products using meat from the supplier. The company doesn’t sell any Shanghai Husi items in Japan, spokesman Minoru Matsumoto said by phone yesterday.

Meat from Shanghai Husi was the source of about 20 percent of the chicken McNuggets McDonald’s sold in Japan, the company’s local unit said in a statement on its website. The fast-food chain suspended the sale of affected products on July 21 and has resumed McNuggets sales using meat from a different supplier, it said.

Macau Imports

McDonald’s said it was investigating allegations in the report by Shanghai-based Dragon TV, adding that it was “not acceptable at all” if claims were true. Chinese outlets of the Oak Brook, Illinois-based fast food chain have also stopped selling meat products from Shanghai Husi.

Macau’s authorities also halted imports from Shanghai Husi, Xinhua reported. About 576 kilograms of frozen chicken from the company were imported from May to June and supplied to McDonald’s outlets in the city, according to the report.

McDonald’s will deal with the issue “swiftly and appropriately,” Chief Executive Officer Don Thompson said on an earnings call this week. “We do have audits of our suppliers. In this case, we do feel that we were a bit deceived relative to one of these plants, so we’re clearly looking at that.”

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net; Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editors responsible for this story: Stephanie Wong at swong139@bloomberg.net Brendan Scott, Suresh Seshadri


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