NEW YORK (TheStreet) -- YUM! Brands (YUM), the parent company of KFC and Pizza Hut along with McDonald's (MCD), the world's largest restaurant chain, were falling Monday in reaction to yet another food health scare in China.
Louisville-based YUM! was losing 3.4% to $74.77 while Oak Brook, Ill.-based McDonalds was falling 0.9% to $98.09.
McDonald's and Yum took to their official Chinese microblogs to issue an apology on Monday, shortly after the Shanghai Municipal Food and Drug Administration shut down the Shanghai Husi Food Company, a unit of Aurora, Ill.-based OSI Group which had sold processed meat products to YUM! and McDonald's which reportedly found their way into products sold at the popular restuarants.
Shanghai Husi's was forbidden to make further sales after allegations that the company was using rotten meat to make fast-food products, falsifying expiration dates, processing contaminated meat and mixing both expired and fresh meat in an extensive Chinese TV broadcast from Dragon TV channel.
The incident follows a 2012 scare regarding batches of chicken being packed with excessive amounts of antibiotics. On the current matter, a representative from McDonald's issued the following statement:
"We are committed to the highest standards of food safety and our customers are always our number one priority. If confirmed, the practices outlined in the report are completely unacceptable to McDonald's. We are no longer serving product from the facility. This matter is being thoroughly investigated and we are cooperating fully with the authorities".
Both Yum and McDonald's said they plan to conduct their own investigations but until then, they have stopped buying meat products from certain suppliers, a move that may result in shortages of their products.