U.S. food group CEO to brief media as McDonald's feels pinch in China food scandal

SHANGHAI (Reuters) - The head of U.S. meat supplier OSI Group, the parent company of a Chinese firm at the centre of a food safety scandal, will hold a news conference in Shanghai later on Monday, as McDonald's Corp (MCD.N) struck more meat dishes off its menus in China.

Sheldon Lavin, the millionaire chairman, CEO and owner of Illinois-based OSI, apologised last week for the scandal at Shanghai Husi Food which has prompted several fast-food brands to drop its products from outlets in China, Japan and Hong Kong and switch suppliers.

OSI said over the weekend it would take all products made by Shanghai Husi Food off the market as it carries out an internal investigation and brings in a new management team.

Lavin and OSI executives have scheduled their news conference for 2.30 p.m. (7.30 a.m. BST) at a Shanghai hotel, a China-based OSI official said.

At least three McDonald's outlets in Shanghai and Beijing, visited by Reuters reporters on Monday, had stopped selling all or most of their meat products. Outlets in cities such as Tianjin and Wuhan were also affected, according to microblog postings.

A spokeswoman at McDonald's in China said its beef, chicken and pork products were affected at outlets across the country, though the level of impact varied. In an emailed statement, McDonald's said it had withdrawn all products from the Husi group in China since Friday. "As a result, we are now only offering a limited menu in our restaurants around the country."

"We are leveraging our network of suppliers to resume our full menu offerings. Some restaurants will resume offering full menu in early August and some may take a little longer. We apologise to our customers for causing them such concern and inconvenience," it added.

Shanghai Husi Food was accused earlier this month by a TV documentary of mixing expired meat with fresh produce and forging production dates. Regulators in Shanghai said Husi had forged the dates on smoked beef patties and then sold them after they expired. Police have detained five people as part of their investigation.

DISAPPOINTED DINERS

"I wanted to order chicken products today," said Tan Qiang, 23, at one McDonald's outlet in central Shanghai. "But they only had one type of combo and nothing else. I was disappointed not being able to eat what I want."

Outside another nearby McDonald's, an 18-year-old student who only gave her surname as Li, said: "For big companies like McDonald's, they should feel sorry for what they did to customers. I won't accept their apologies."

The food scandal has dragged in other global food brands such as KFC and Pizza Hut parent Yum Brands Inc (YUM.N) and coffee chain Starbucks Corp (SBUX.O).

Food safety is a big issue for Chinese consumers after dairy products tainted with the industrial chemical melamine led to the deaths of six infants in 2008 and left many thousands sick.

(Reporting by Kazunori Takada and Paul Carsten in BEIJING; Donny Kwok, James Zhang and Nikki Sun in HONG KONG; Editing by Ian Geoghegan)