Abstract

The case unearths the food scandal at Shanghai Husi Food Company, a Chinese subsidiary of OSI, one of the world’s biggest food processors. OSI China came under fire after its Shanghai plant was exposed as having processed expired meat to avoid losses. The case details the actions taken by the Chinese authorities in response to the meat scandal. It also attempts to analyze the impact of the crisis on the Chinese food industry. The scandal severely affected the reputation of OSI as one of the leading meat processors in the world. After the scandal broke, fast-food chains in China such as Papa John’s, Burger King, Starbucks, KFC, and Pizza Hut to whom OSI had been supplying chicken and beef products severed ties with the company. The scandal highlighted the sad state of affairs in the Chinese food industry. It led to mass public outrage at the country’s outmoded quality assurance supervision, with critics arguing that only in China could foreign companies get away with such tactics for so long. The case highlights the risks of foreign firms doing business in China and aiming to profit from rapidly growing demand for meat in China, where lax legal enforcement was often the cause of shocking food safety scandals. Though OSI was working to fix the problems, its business in China came to a standstill, and it was losing millions of dollars a day in revenue. The case concludes by emphasizing the need for food safety laws to be revised in China and for stiffer penalties to be imposed on the law breakers. Going forward, it remained to be seen whether OSI would be able to build its business and resurrect its image in China.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Gain an insight into food safety issues in China.
• Understand the food scandal and its impact on OSI in particular and the Chinese food industry in general.
• Analyze the damage control measures undertaken by the Chinese government.
• Study the role of regulation and enforcement to prevent the occurrence of such incidents.
• Understand the risks of foreign firms attempting to profit from the rapidly growing demand for processed food in China

Keywords

Food scandal, OSI China,Food safety, Shanghai Husi Food Co Ltd,Food security,Chinese fast food industry,China Food and Drug Administration (CFDA),China’s Food Safety Law (FSL)