Bloomberg News

Japan Halts Imports From Firm as China Meat Scare Spreads

July 23, 2014

FamilyMart And McDonald's Pull Affected Meat

People pass a FamilyMart Co. convenience store and a McDonald's restaurant in Kawasaki, Kanagawa Prefecture, Japan. Photographer: Yuriko Nakao/Bloomberg

Japan suspended food imports from a 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.

Japanese authorities would strengthen safety checks on food entering the country, Chief Cabinet Secretary Yoshihide Suga said today. The government hadn’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 yesterday 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 today.

Toxic Dumplings

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.”

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 today.

McDonald’s Nuggets

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.

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.

McDonald’s will deal with the issue “swiftly and appropriately,” Chief Executive Officer Don Thompson said on an earnings call yesterday. “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.”

-- With assistance from Takashi Hirokawa in Tokyo

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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