OSI China in Food Scandal

In February 2016, US-based food-processing company OSI Group LLC (OSI) disputed a Chinese court’s ruling that it had sold substandard food to fast-food chains in China and claimed that it had been the subject of a smear campaign. China had been OSI’s key growth market but in July 2014 its business there was hit hard and the company found itself in the eye of the storm over allegations that its Chinese subsidiary Shanghai Husi Food Co Ltd (Shanghai Husi) had supplied expired or rotten meat to several foreign fast-food chains operating in China and Japan. After investigating the matter, the Shanghai court fined two units of OSI 1.2 million yuan each (US$182,000), suspended their operations, and awarded jail sentences to ten employees. Challenging the court’s verdict, the group said in a statement, “After 17 months of legal proceedings, detainment of Husi employees for as long as 17 months, a harmful smear campaign driven by state-owned media, as well as the denial of entry of press and senior OSI leaders to all court proceedings, the court of jurisdiction has reached an unjust verdict. We have made every effort to follow firm instructions to silently co-operate on the advice it would lead to a fair conclusion. However, we can no longer accept injustices against our people and our reputation.”..