McDonald's said Monday that a scandal over a meat supplier in China is hurting sales in the region and its global sales forecast for 2014 is "at risk," Reuters reported.
The world's biggest hamburger chain said in a regulatory filing that there's been "significant negative impact" in China, Japan and other affected markets, according to Reuters. These regions make up about 10 percent of McDonald's revenue.
An undercover local Chinese TV report on July 20 showed workers at Shanghai Husi Food Co Ltd using expired meat and doctoring food production dates, Reuters reported. Regulators immediately closed the factory, which is part of OSI Group LLC, a U.S. food supplier and important McDonald's partner.
"While this matter will negatively impact results in the near term, we cannot reasonably estimate the impact on full year 2014 earnings at this time," according to a regulatory filing from McDonald's, which has just over 2,000 restaurants in China, according to Reuters.
The Oak Brook, Illinois-based company had previously said it expected the worldwide sales measure to be "relatively flat" for the year, Reuters reported.
The updated guidance comes after a Chinese TV report last month showed workers at one of McDonald's meat suppliers in Shanghai using expired meat, according to Reuters.
The supplier, Shanghai Husi Food Co., is a division of OSI, a company based in Aurora, Illinois that has been a longtime supplier to McDonald's around the globe, Reuters reported. It counts numerous other fast-food chains as its clients.
As the Chinese government investigates Husi, some McDonald's restaurants have been left without beef or chicken, according to Reuters.
The plant in question also supplied some McDonald's restaurants in Japan, Reuters reported. McDonald's is so far sticking by OSI, saying that it will work with other Husi plants in China to supply affected restaurants.
