Yum! Brands, Inc. (YUM), McDonald’s Corporation (MCD) China Scandal A Very Bad Situation: Eunice Yoon


Yum! Brands, Inc. (NYSE:YUM) and McDonald’s Corporation (NYSE:MCD) are in a really bad situation with their food safety scandal in China, Eunice Yoon said in a recent report on CNBC.

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The current issue facing Yum! Brands, Inc. (NYSE:YUM) and McDonald’s Corporation (NYSE:MCD) in China stems from an investigative report aired by Dragon TV in the country which featured a reporter who went undercover in one of the suppliers of the two companies. The reporter revealed that workers inside Shanghai Husi, a business owned by Aurora, Illinois-based OSI Group, LLC, repackaged expired meat and shipped them to both Yum! Brands, Inc. and McDonald’s Corporation.

According to Yoon:

“It’s a really bad situation. Just when you thought Yum! Brands was starting to recover from a food safety scandal from two years ago, both it and McDonald’s are now the target of a new food safety scandal. Both of them used a supplier that was targeted in an investigative report by Chinese state TV. In that report, a reporter went undercover for two months and said that he found unhygienic conditions [and]also expired beef and chicken which he said was sold to both of the fast food companies and could end up in their restaurants.”

Yoon added that this has led to an outrage against Yum! Brands, Inc. (NYSE:YUM) and McDonald’s Corporation (NYSE:MCD) by the Chinese people who are hotly discussing the issue in the country today. The impact of the food safety scandal in China is especially damaging to both the companies as the territory is an important market for them, Yoon said. She explained.

“It’s very bad news for both the companies [which]want to dominate this market to help offset sales in the United States. China is Yum! Brands, Inc.’s (NYSE:YUM) biggest market. It’s also McDonald’s Corporation’s (NYSE:MCD) fastest growing market.”

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