McDonald’s (MCD), Yum!Brands (YUM),Burger King (BKW) and Papa John’s (PZZA) Complying With Chinese Authorities As Regards Their Shanghai Outlets

Five fast-food giants namely McDonald’s Corporation (NYSE:MCD), Yum! Brands, Inc. (NYSE:YUM) subsidiaries namely KFC and Pizza Hut, Burger King Worldwide Inc (NYSE:BKW), Papa John’s (NASDAQ:PZZA) and Carl’s Jr have complied with the Chinese government directive of publishing their sources of meat on the Internet. This move comes in the wake of an order issued by the government on Saturday asking the companies to disclose their suppliers as an aftermath of a television footage that revealed a serious breach of hygiene and safety standards.

McDonald's (MCD) (640x79)

Being a country wherein food safety is regarded as occupying the topmost spot in terms of priorities, China is extremely conscious about the manner in which food outlets operate irrespective of whether they are a part of a global chain or not. This is the reason as to why footage that showed meat in Shanghai Husi plant being handled bare-handed and carrying a tinge of staleness was taken seriously enough to cause the government to immediately pass orders. Because Shanghai Husi is a subsidiary of an American company named OSI, its practices are a direct reflection of the ethos of the parent company.

Subsequent to the footage having been showed, the companies reacted by withdrawing some of the products from their menus. For McDonald’s Corporation (NYSE:MCD), it meant eliminating chicken nuggets from its menu in Japan and preventing Big Macs from being served in certain cities. Spicy McWings was another one of its products that was adversely impacted. For the company, all of this spells disaster where its sales figures are concerned since the impact of the scandal is likely to have long-term reverberations.

But on their part, the companies have saved a lot of ground by reacting immediately and displaying the requisite information. More than anything else, they have proved their belief in transparency by disclosing confidential information of the Internet and this in itself could salvage their image. In fact, experts view this move as being ingenious because it will have redeemed them in the eyes of Chinese people who will appreciate their efforts.

Apology has been issued by the OSI head-quarters in Illinois too but it still could not prevent Yum! Brands, Inc. (NYSE:YUM) from expressing its misgivings in the following statement –

“These events triggered extensive news coverage in China that has shaken consumer confidence, impacted brand usage, and disparaged the hard work of our over 400,000 Chinese employees.”

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This article has been written by Vinita Basu and edited by Serkan Unal.
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