Popular food groups KFC and McDonald's were allegedly supplied with stale meat in China, and the companies stopped using products from the supplier.
In addition, the Shanghai food and drug administration has suspended the business of the supplier, Shanghai Husi Food Co., Ltd, and ordered the firm to take all its meat products off the shelf. The administration has also closed the processing facility and seized suspected raw food items.
Shanghai Husi Food is the Chinese branch of privately held US-based food supplier OSI Group LLC.
Chinese local media earlier reported that Shanghai Husi Food sold chicken and beef past their expiry date to international food chains including McDonald's, KFC and Pizza Hut. KFC and Pizza Hut are owned by US-based Yum! Brands.
Undercover reporters found Husi Food workers reprocessing and repackaging meat products whose due date had already expired.
On 21 July, McDonald's and Yum apologised to Chinese consumers for the issue.
"Food safety is the most important thing for McDonald's, and we always strictly abide by national laws and regulations and related standards to ensure consumers can enjoy our products at ease," McDonald's said in the Weibo statement.
Yum said it had already started an investigation into the OSI unit, adding that it will cooperate with the work of relevant Chinese government departments.
Meanwhile, an official at OSI said the company is cooperating with authorities in the investigation, according to Xinhua news agency. The official claimed the company has a strict quality-control system.
The reputation of Yum and McDonald's had been hit in China due to the food safety scandal in 2012, when China Central Television reported the companies may have sold chicken fed by unapproved antibiotic drugs and growth hormones.
Following the scandal, Yum and McDonald's suffered a significant decline in profits from China in 2013. The companies made public apologies and vowed to ensure food safety going forward.
Food safety has been a serious issue in China ever since the 2008 milk scandal when infants fell ill or died after consuming tainted milk powder.