Where's the meat (and veggies)? Tainted food scandal slows down McDonald's in China

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The Filet-O-Fish is no longer alone on McDonald's menus in northern China. It has now been joined by a very short list of fellow meat offerings — the McChicken, the double cheeseburger, the five-pack of chicken McNuggets. But theirs remains a lonely job: feeding customers still willing to enter a restaurant struggling to get clean food on plates after a major food scandal.

It has now been more than two weeks since a Shanghai television report showed workers at a McDonald's supplier repackaging expired meat and the Golden Arches remains, in much of China, bereft of its signature Big Mac and most other menu offerings — even the veggie wrap. McDonald's subsequently dropped that supplier and struggled to replace it, leaving big holes in its menu, and bigger holes in its restaurants.

Walk in to a McDonald's today, and the normal din of the lunch-time crowd has been replaced by a half-filled dining room, some seats occupied by sleeping heads buried under hats while others sit and mull the chain's bad fortune.

Of the few sandwiches that are available, "none have vegetables on them," said Andy, a 28-year-old accountant who gave only his first name and laughed as he recounted his conversation with counter staff. "They told me they need to find new suppliers, and those suppliers first need to grow all of the vegetables."

It's almost certainly not true. The McChicken wasn't available last week; its reappearance Monday marked a small victory for meat finding its way back onto brown trays. Other products will no doubt follow, in less time than it takes to grow a head of lettuce. On Monday, a McDonald's spokesperson said in an interview that Beijing, and other cities like Guangzhou, "will have a full menu later this week."

What may not return, however, is the halo that once hovered over Ronald McDonald in China.

When the chain opened its first Chinese outlet, in 1992, it rolled out a three-storey mega-location — then its largest on earth, with 700 seats and 29 tills — on prime real estate across from Tiananmen Square in the heart of Beijing. On day one, 40,000 people surged through the doors, eager to eat at a place that symbolized progress, and then embodied a somewhat foreign sense of scientific rigour in food.

Its "highly efficient service and management, its spotless dining environment, and its fresh ingredients have been featured repeatedly by the Chinese media as exemplars of modernity," Yunxiang Yan, who now directs the UCLA Center for Chinese Studies, wrote in the book "Golden Arches East." It grew quickly from there, creating in China the kind of "third place" that Starbucks made popular in North America.

It was a place of wonder, its fries so perfectly made that some Chinese believed they were made from a secret cube-shaped potato variety. Its management systems were the model of western sophistication. Its service offered an equality previously unknown in status-conscious China. McDonald's staff, in the early days, kept track of children's birthdays and sent them reminder cards to come celebrate at McDonald's, helping introduce a then-foreign tradition of birthday parties. The company even helped change the meaning of smiling at a stranger — making it a mark of warmth rather than the near-insult it was once considered.

(KFC was almost more potent: "Some described it as 'the castle of fairy tales,'" according to Zhang Yiwu, deputy director at the Center of Cultural Resource Research at Peking University. "It used to be fancier than having roast Peking duck at the famous Quanjude restaurant.")

All of these were, in some ways, foreign virtues that McDonald's could trade on to build what is now its third-largest geographic region, with some 2,000 restaurants in China. While still second to KFC in China, the popularity of McDonald's has been boosted by its roots in the western world, a pedigree that has in recent years instilled a sense of confidence among Chinese consumers pelted with a series of food scandals: melamine in milk, rat meat sold as lamb, fox meat sold as donkey, counterfeit baby formula and alcohol, even soya sauce made from hair mixed with condoms and syringes.

Now McDonald's, it seems, is no different.

"I used to think McDonald's and other fast food companies use foreign suppliers with better quality," said Gao, a 36-year-old teacher who asked to be identified by her surname.

No more.

Western fast food may have tasted like cardboard to some, but at least Chinese consumers could maintain that "we know the food is hygienic," said David Moser, academic director of an overseas Chinese culture and language program at Capital Normal University. The McDonald's scandal "cuts deeply into that image."

That cut extends beyond McDonald's. "In the past, people were apt to think foreign enterprises have better quality than domestic and private enterprises," said Mr. Zhang, the Peking University researcher. "Now the myth has been broken. Now they are back on the same level as everyone else."

That may be exactly the point. China has always had an uncomfortable relationship with foreign companies. McDonald's itself was evicted from its first flagship location in 1994, two years after opening, its 20-year lease left in tatters. And the squeeze on western brands has continued, particularly in recent months. Google recently joined Facebook and Twitter on the censored list. Chinese state media reports and government directives have been used to damage companies like Apple, Microsoft, Starbucks and Qualcomm.

McDonald's now joins that list. Its sheen sullied, one of its competitive advantages is damaged and Chinese domestic fast food joints suddenly have a playing field tilted slightly in their favour.

It's a tactic not lost even on those who see an upside to the McDonald's meat scare. Andy, the 28-year-old accountant, was happy to find open seats at lunch-time, when McDonald's is normally jammed. He wasn't worried about the food: "I don't think McDonald's has a problem as serious as local companies," he said.

But he was entertained by the idea of the Big Mac as a globally strategic pawn.

"Americans raise taxes on Chinese companies. And China, we need to fight back, which is the major reason we focus on problems with foreign companies," he said. "It's a war."

With additional reporting by Yu Mei