Yum Brands, owner of Kentucky Fried Chicken and Pizza Hut,
is suing OSI because its unit in China, Shanghai Husi, supplied it with chicken that
was contaminated and old.
A major scandal emerged over Shanghui Husi after a television
station employee got hired by Shanghui and gathered video and other evidence of
wrongdoing.
McDonald's and some other fast-food chains were also implicated, both
in the Chinese market and products sold by the chains in their stores in other
nations, including the United States.
Yum Brands said the food-safety scandal caused its sales to drop by
13 per cent in China.
“The company plans to vigorously pursue legal action against OSI and
Husi to recover damages from the incident,” Yum said in the filing.
OSI, with headquarters in Aurora, Illinois, also announced a deal to partner with a British company that will supply beef for its European market.
Bloomberg news agency reported that McDonald’s China has hired a China food safety chief
and will increase unannounced audits of suppliers.
McDonald’s suppliers McKey Food Services Ltd., Cargill Inc, Hormel
Foods Corp., Trident Seafoods Corp. and Fujian Sunner Development Co. are
ramping up meat production to replace products previously sourced from OSI
China, Bloomberg says.
An overseas news report has suggested OSI might withdraw
entirely from the China market, but OSI says it remains
committed to China and has appointed Golden State Foods subsidiary KanPak China
to manage its Guangzhou facility that produces vegetable and fruit products.
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