Shanghai Husi rotten-meat scandal blows the lid on a huge problem for China's food processing industry

When inspectors visited Shanghai Husi earlier this summer, the production line at the plant now at the centre of an international food scandal appeared in good order, with fresh meat being handled by properly attired workers and supervisors keeping a watchful eye over the process.

However, if they had arrived unannounced a day before, they would have found piles of blue plastic bags filled with out-of-date meat stacked around the factory floor, said a worker at the facility. The old meat was often added back into the mix to boost production and cut costs, the worker said.

"The next day, that meat just disappeared. Someone must have disposed of it. The manager said it was an inspection," said the worker, who wasn't authorised to talk to the media and so didn't want to be named.

On July 20, following an undercover local TV report that claimed workers used expired meat and doctored food production dates, regulators closed the factory, part of OSI Group, a US food supplier. Police have detained five people including Shanghai Husi's head and quality manager.

The scandal has hit mainly big foreign fast-food brands - including McDonald's and Yum Brands, which owns the KFC and Pizza Hut chains - and it underlines the challenges facing inspectors in China's fast-growing and sprawling food industry. China is Yum's biggest market and McDonald's third largest by outlets.

Behind the thousands of brightly lit restaurants offering what Chinese consumers see as better quality food lie supply chains that rely on an army of poorly regulated and inadequately audited processing plants. Yum has around 650 suppliers in China alone.