Meat supplier OSI Group admits fault in China food safety scandal

CHICAGO, July 23 Wed Jul 23, 2014 4:00pm EDT

CHICAGO, July 23 (Reuters) - OSI Group, the U.S.-based meat supplier at the center of a new food safety scandal in China, on Wednesday admitted to problems at a plant in Shanghai that have cost the company business with top fast-food chain Yum Brands Inc.

A TV report in China this week showed workers at an OSI unit, Shanghai Husi Food Co Ltd, processing out-of-date meat and meat that had fallen of the factory floor.

"What happened at Husi Shanghai is completely unacceptable," said Sheldon Lavin, chief executive of privately held OSI Group.

Yum said on Wednesday it had stopped buying food from OSI in China, Australia and the United States after Shanghai police detained five people connected to the meat supplier's factory. OSI was not a major supplier of Yum, according to the restaurant.

(Reporting by Tom Polansek; Editing by Dan Grebler)