KFC investigated after food scare

Jan 09 2013 13:54

Shanghai - Chinese customers of KFC, the biggest fast food chain in the country, said on Wednesday they would still patronise it despite a government food safety investigation which has hit sales.

US-based Yum! Brands, whose portfolio includes KFC and Pizza Hut, said this week that sales in its key China market were forecast to fall more than expected in the fourth quarter in the wake of the probe into excess antibiotic levels in chickens.

Yum's New York-listed stock fell 4.2% on Tuesday after the news.

China's commercial hub of Shanghai and the northern province of Shanxi said last month that they were investigating KFC suppliers over claims of high levels of antibiotics in chicken.

But at a KFC in downtown Shanghai, one of more than 4 000 of the chain's restaurants in China, lines still formed at lunchtime - although some customers said they had cut back amid the food safety worries.

"I will still eat KFC food, but less often. It's cheap and convenient," office worker Zheng Daqian said.

Others said KFC was more trustworthy than small restaurants, given China's repeated food safety scandals.

"If you dig further, how many restaurants in China are better than KFC? I believe KFC will solve the issue," said white collar worker Zhu Lei.

Chinese consumers are regularly hit with food scares ranging from cancer-causing toxins found in cooking oil to food items that are expired or contain dangerous chemicals and additives.

"Due to adverse publicity associated with a government review of China poultry supply... we now expect China division same-store sales to be minus 6% for the fourth quarter of 2012," Yum said in a statement earlier this week.

The company had previously predicted a 4% fall but cited a "significant impact" on KFC China sales in the last two weeks of December.

Yum previously said it was cooperating with the government review and the two suppliers under investigation represented an "extremely small" percentage of its chicken.

China's agriculture ministry has said it was investigating reports that poultry producers were giving supplements to chickens, but it did not name Yum.

China was rocked by one of its biggest-ever food safety scandals 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 ill.

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yum brands  |  kfc  |  food safety



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