Yum! Brands sales in China hit by govt probe
Updated: 2013-01-09 09:21
By Wang Zhuoqiong (China Daily)
|
|||||||||||
KFC owner says business affected worse than expected by chicken scare
Yum! Brands Inc, owner of the KFC fast-food chain, said fourth-quarter same-store sales fell more than projected in China as demand was hit by a government investigation into one of its former chicken suppliers.
Industry experts had predicted the negative impact of the probe, which is expected to be felt in the long term.
Customers enjoy their meal at a KFC store in Yichang, Hubei province. Yum! Brands Inc, owner of the fast food chain, said fourth-quarter same-store sales fell more than projected in China after a government probe into one of its former suppliers hurt demand. [Photo / China Daily] |
KFC sales in China in the last two weeks of December were affected by the adverse publicity associated with the probe into Chinese poultry suppliers, the US company said in a filing with the United States Securities and Exchange Commission on Monday.
China same-store sales fell by 6 percent year-on-year in the fourth quarter, compared with a previous estimate for a decline of 4 percent, the filing said.
Shanghai's food regulators said that tests conducted by a third-party agency from 2010 to 2011 found that eight batches of chicken supplied to the company by Liuhe Group Co had excessive levels of antibiotics. Yum said it stopped all supplies from Liuhe in August 2012.
|
The revelation sparked heated debate among Chinese consumers. The negative impact will linger for a long time for KFC, which relies heavily on domestic chicken suppliers, said Gao Jianfeng, general manager of the Shanghai-based Bogo Consultants.
With a huge number of restaurants demanding large quantities of chicken - the main ingredient on their menus - KFC won't be able rebuild its supply chain in the short term, Gao said.
He added that food safety issues in the Chinese supply chain, from chicken to fodder, are widespread.
"No single company can preserve its reputation in such an industrial chain," he said.
An increasing number of fast-food consumers have started to go to other Western chains such as McDonald's or Burger King, he said.
Latest news about KFC chicken probe
KFC supplier used excessive additives in chicken feed
KFC supplier chicken farms under investigation
Shanghai food watchdog checks KFC chicken samples
China diners say more than economy hurting KFC
Read more in
Related Stories
Suhai chicken sent to KFC passes national standard 2012-12-05 21:06
KFC vows to pursue expansion in smaller markets 2012-09-27 09:58
Yum! opens 300th KFC restaurant in Beijing 2012-08-22 09:30
East Dawning shuts airport store in Beijing 2012-08-15 11:15
KFC serves up a recipe for successful investment 2012-04-09 10:31
Milk price hikes leave many feeling sour 2012-03-02 09:01
Today's Top News
President Xi confident in recovery from quake
H7N9 update: 104 cases, 21 deaths
Telecom workers restore links
Coal mine blast kills 18 in Jilin
Intl scholarship puts China on the map
More bird flu patients discharged
Gold loses sheen, but still a safe bet
US 'turns blind eye to human rights'
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
All-out efforts to save lives |
Liaoning: China's oceangoing giant |
Poultry industry under pressure |
'Spring' in the air for NGOs? |
Boy set to drive Chinese golf |
Latest technology gets people talking |