Meat supplier in China food scandal grew with McDonald's

Wed Jul 23, 2014 8:32pm EDT
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By Tom Polansek

July 23 (Reuters) - Eight months ago in front of a crowd of food industry executives gathered at a fancy Chicago hotel, a top McDonald's Corp executive lauded the boss of meat supplier OSI Group for his dedication to the fast-food giant's "McFamily".

On Wednesday, McDonald's stood by its long-time business partner OSI in the face of a deepening food safety scandal at a unit of OSI in China where five people are detained.

Fast food chain KFC's parent Yum Brands cut ties to OSI, but the history of McDonald's and OSI are more deeply intertwined.

Illinois-based OSI' octogenarian owner, Sheldon Lavin, has built an empire in China over the past 20 years, largely on the back of business from the Golden Arches.

Privately held OSI, little known outside of the tight-knit food industry, has worked with McDonald's for nearly 60 years.

Lavin was "appalled" at a report on China's Dragon TV that showed workers at an OSI unit, Shanghai Husi Food Co Ltd, processing out-of-date meat and meat that had fallen on the factory floor, he said in a statement on Wednesday. OSI declined to comment on company plans or history.

A former banker, Lavin initially worked as a consultant for OSI, joining full time in the 1970s at the request of McDonald's. He took control in the 1980s, according to industry magazines, which did not describe how Lavin became owner.

He focused aggressively on expanding in China, telling employees in the early 1980s: "I don't care if we sell the erasers off pencils; we are going to China," according to a 2012 article in The National Provisioner magazine.   Continued...