This question was put to Shaykh Muhammad ibn ‘Uthaymeen (may Allaah have mercy on him), who replied:
This is a mistake which goes against the sharee’ah of Allaah and is cheating the slaves of Allaah. The place where the hadiy should be slaughtered is in Makkah, because the Messenger of Allaah (peace and blessings of Allaah be upon him) slaughtered his hadiy in Makkah, not in Madeenah or in any other place. The scholars have stated that, and said: It is obligatory to slaughter the hadiy of tamattu’ and qiraan, and the hadiy offered to compensate for omitting an obligatory part of Hajj, in Makkah. Allaah has stated that with reference to the penalty for hunting in ihraam, as He says (interpretation of the meaning):
“the penalty is an offering, brought to the Ka‘bah, of an eatable animal (i.e. sheep, goat, cow) equivalent to the one he killed”
If a specific place is mentioned, it is not permissible to change it to somewhere else, rather it must be done in that place. So the hadiy must be slaughtered in Makkah, and distributed in Makkah. If it so happens that he cannot find anyone to accept it in Makkah, which is an assumption that may be impossible, then there is nothing wrong with slaughtering it in Makkah and sending the meat to anyone who needs it in the Muslim lands, the closest then the next closest, or where the need is greatest.