Authorities in Shanghai have shut down a factory of the US food provider OSI Group for selling out-of-date meat, including to restaurant giants McDonald's and KFC.

A Shanghai television channel has reported that workers at the plant mixed expired meat with fresh meat product and deliberately misled quality inspectors from McDonald's.

The Shanghai Food and Drug Administration has closed the Shanghai Husi Food Co. factory and seized products which allegedly used expired meat.

Police are investigating the allegations, threatening "severe punishment" in the future.

McDonald's says in a statement it "immediately" stopped using the factory's produce while Yum! Brands - the owner of KFC and Pizza Hut - says it has also stopped using meat from the OSI factory.

Other well-known OSI China customers include Burger King, Starbucks and Subway.

Television footage shows workers in white suits picking up meat and hamburger patties from the floor before putting them back into processing machinery, and an employee handling out-of-date beef and calling it "stinky".

The allegations are the latest in a series of food safety scandals in China, which has been rocked by food and safety problems due to lax enforcement of regulations and corner-cutting by producers.

One of the worst instances occurred in 2008 when the industrial chemical melamine was found to have been illegally added to dairy products, killing at least six babies and making 300,000 people ill.

Last year, China detained hundreds of people for food safety crimes, including selling rat and fox meat disguised as beef and mutton, following a three-month crackdown by police.

US retail giant Walmart earlier this year said it would tighten inspections of its suppliers in China after it was forced to recall donkey meat products from its Chinese outlets that had been found to contain fox.

AFP