After facing problems with a supplier in China, McDonalds Corp. is in the process of overhauling its food-safety strategy in the Asian country to recover from a blow to its reputation and sales.
The fast food chains China division said in a statement, which was cited by Bloomberg: “McDonald’s expects all staff and suppliers to carry out these added measures to enhance their food safety and quality systems. We have zero tolerance to non-compliance.”
McDonalds revealed that it intends to review surveillance video from meat-production facilities in China. The company also said that it will increase audits of suppliers. According to McDonalds statement, more than 50% of the additional audits will be unexpected and will be conducted together by both the management teams of the company and third-party auditors.
After the fast food chain faced problems with its previous supplier Shanghai Husi Food Co., McDonalds Chinese division replaced products sourced from U.S.-based OSI Group LLC, owner of Shanghai Husi, with other suppliers. An investigation led by the Chinese authorities has been started against OSIs unit in July.
McDonalds has published details about their suppliers on the website of its Chinese division, along with another four fast food chains. The publication followed a request from Shanghai authorities after the latest problems related to food safety problems.
The increased audit control that McDonalds will impose on its suppliers is part of the companys strategy to mend its image in China and restore sales. The fast food chain currently has more than 2 000 stores in the country and five existing meat suppliers: McKey Food Services Ltd., Cargill Inc, Hormel Foods Corp., Trident Seafoods Corp., and Fujian Sunner Development Co.
McDonalds Corp. fell by 0.45% on Friday in New York to close at $93.72 per share, marking a one-year change of -1.20%. The company is valued at $92.03 billion. According to CNN Money, the 18 analysts offering 12-month price forecasts for McDonalds Corp. have a median target of $99.00, with a high estimate of $110.00 and a low estimate of $92.00. The median estimate represents a +5.63% increase from the last price of $93.72.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
