July 23, 2014 at 1:00 am

China's meat supplier in scandal has global reach

New York— It isn’t a household name, but the company at the center of a food scandal in China helps make some of the world’s most popular foods, including the Big Macs and Quarter Pounders served at McDonald’s locations.

OSI Group, a privately-held company based in Aurora, Illinois, was thrust into the spotlight this weekend when a Chinese TV station reported that one of its Shanghai plants repackaged old beef and chicken and slapped new expiration dates on them. The scare has ensnared chains including McDonald’s, KFC, Burger King and Starbucks, all of which got ingredients from a unit of OSI in the region called Husi Food Co.

The controversy deepened Wednesday when five workers for Husi, were detained by police. An official with China’s food safety regulator told the Xinhua News Agency that some of the illegal conduct it uncovered was an arrangement “organized” by Husi.

None of OSI’s more than 50 other plants around the world have been implicated and CEO Sheldon Lavin noted in a statement that authorities in China have inspected and found no issues at its other facilities. He called what happened at the Shanghai location “completely unacceptable.”

The scandal is a blemish for OSI, which began as a family-run meat market in 1909 and prides itself on its high standards. The company notes on its website that it has a “strong heritage of quality and service” and that food safety and quality assurance are “guiding principles.”

Its business took off after Ray Kroc tapped it in the 1950s to be a beef supplier for McDonald’s Corp. OSI grew alongside McDonald’s as the hamburger chain expanded around the world, and even helped create the McRib.

OSI doesn’t have to report financial information, but according to PrivCo, which researches privately-held companies, it had $6.13 billion in sales last year. OSI doesn’t publicly disclose all of its clients either, but it supplies numerous big-name chains including Chipotle Mexican Grill Inc., for which it cooks some beans and carnitas and barbacoa meats.

In the U.S., OSI has said it has systems in place to ensure products can be located and taken out of the system within two hours if any issues arise. Executives have said they work with an outside public relations agency to periodically stage mock crises to be prepared for real-life controversies.

Richard Adams, who now runs a consulting firm for franchisees, said OSI closely oversees its production process in the U.S. and that he didn’t know how the lapses in China occurred.

“They wouldn’t be a McDonald’s vendor if they weren’t producing quality products,” Adams said.