Food safety authorities have shut down two chicken farms in eastern China, including one that supplied Yum Brands' KFC and McDonald's, the official Shanghai Daily reported on Thursday.
The closures come after a report by state television earlier this week that some poultry suppliers in Shandong province had accelerated the growth of chickens by using chemical-laced feed.
The two slaughterhouses in Shandong have been ordered to halt production and seal all raw chicken products until samples can be tested, the newspaper said.
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The paper, citing a report from Shandong's animal husbandry and veterinary bureau, said the "relevant people responsible for these farms have been detained by police or are under further investigation".
Officials at the bureau could not be reached by Reuters for comment.
The Shanghai Food and Drug Administration (FDA) is also conducting tests on poultry supplied to a Yum Brands logistics centre in Shanghai, according to the official Xinhua news agency. Results from this test are expected as early as Thursday, the Shanghai Daily said.
KFC's Chinese subsidiary has pledged to work with authorities, while McDonald's wrote on its official microblog that its chicken and raw materials pass through independent, third-party laboratory tests.
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China has been trying to stamp out health violations that have dogged the country's food sector and includes reports of fake cooking oil, tainted milk and even exploding watermelons. In 2008, milk laced with the industrial chemical melamine killed at least six children and sickened nearly 300,000.
Yum Brands warned in November that it expects sales at established restaurants in China to fall 4 percent in the fourth quarter, despite an improvement in economic indicators such as consumer confidence and retail sales.