McDonald’s halts Liuhe supply

By Cong Mu Source:Global Times Published: 2012-12-27 0:04:04

US fast food chain McDonald's Corp told the Global Times Wednesday that it has stopped sourcing chicken from beleaguered Shandong-based Liuhe Group Co, one of the largest chicken suppliers in China, after a Liuhe factory was shut down for selling chickens with excessive antibiotic residues.

"Liuhe is a secondary supplier to McDonald's (in China). As our responsibility to consumers, McDonald's has temporarily stopped using raw chicken materials from Liuhe Group starting December 18. No chicken product sold in McDonald's restaurants is tied to Liuhe now," the company said in an e-mail response to the Global Times' inquiries.

The chain restaurant operator said that it maintains a strict supply chain management system and standards to ensure food safety, but stopped short of elaborating how it tests for drug residues in its products or who is responsible for the testing.

McDonald's did not mention which company has replaced Liuhe as its chicken supplier.

McDonald's buys processed chicken materials from primary suppliers in China, mainly Shenzhen-based McKey Food Services and the Shanghai-based China branch of OSI Group, the biggest McDonald's food supplier in the world. McKey Food is a joint venture between US-based Keystone Foods, under Marfrig Group, State-owned food producer COFCO, and McDonald's.

A xinhuanet.com report Wednesday said that McDonald's food quality control is administered by its primary suppliers, citing an unnamed PR manager at McDonald's China headquarters.

However, Tian Qingyao, a McDonald's PR manager, denied the statement as incorrect when contacted by the Global Times Wednesday.

Executives at McKey Foods and OSI Group were not immediately available for comment.

The primary suppliers process raw food materials from the secondary suppliers for McDonald's, but it is McDonald's who chooses the raw material suppliers based on its own selection criteria, Guangzhou-based Money Week newspaper reported in April.

The Shanghai Food and Drug Administration (SFDA) sample-tested McDonald's chicken products for antibiotic residues after the watchdog announced December 20 that it had found excessive drug residues in Yum! Brands Inc's samples, the xinhuanet.com report said. Yum! is the operator of another US fast food chain, KFC, in China.

Yum! said on December 18 that it had canceled its contract with Liuhe in August.

McDonald's has yet to decide whether to cancel its contract with Liuhe, pending the SFDA test results, the news report said.

Farmers in Jiaxiang county, Shandong Province who cooperated with Liuhe to raise and sell chickens said some of them lost up to 90,000 yuan ($14,420) recently, as the tainted chicken scandal has weighed on prices, e-commerce website alibaba.com reported Wednesday.

Veterinary drug sellers should bear the main responsibility for the excessive antibiotic residues, because many Chinese farmers were sold the drugs without any knowledge of how to use them properly, Zhu Yi, a veterinary professor at China Agricultural University, told the Global Times.

Poor ventilation, insufficient disinfection and substandard management are also causes of antibiotic overdose in chicken farms, Zhu said, urging more technical support to the farmers.



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