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Yum! moves to deflect chicken antibiotic scandal

By Carina Perkins , 10-Jan-2013

Related topics: Industry & Markets, Financial, Poultry, United States, China

KFC parent company Yum! Brands has moved to reassure over the safety of its food after concerns over antibiotics used by two chicken suppliers to KFC China caused sales in the region to plummet.

The company said it had stopped sourcing chicken from Liuhe Group Co and Yingtai Food Group Co, which are under investigation by the Chinese government. This follows reports in the local press accusing them of violating food safety regulations by using excessive antibiotics and growth hormones to encourage birds to grow faster.

Sales in China have plummeted since the scandal broke in December, causing same-store sales for the fourth quarter of 2012 to contract by 6%, compared to the 4% drop predicted in previous forecasts.

“Our food is perfectly safe to eat, and KFC in China has very strict food handling and quality control standards that meet or exceed all government regulations,” said a statement from Yum!

“We require all suppliers to follow those standards to ensure food safety. We regularly audit our suppliers, and if we ever find a supplier in non-compliance, we take immediate corrective action to resolve the issue, including terminating the relationship if that is warranted. We will continue to co-operate with the Shanghai FDA as they conclude their review and hope to use their findings to strengthen our industry-leading standards and processes to prevent isolated supplier issues from repeating in the future.”

An earlier statement from the company said the two suppliers provided an “extremely small” percentage of KFC China’s chicken products and it did not therefore anticipate any supply shortages.

A number of Chinese poultry producers have now been accused of using antivirals and growth hormones to produce “fast-growing chickens”.

The Liuhe Group, one of the biggest chicken producers in China’s Shandong province, was implicated after a report was aired on China Central Television in December claiming the company had supplied chickens containing excessive levels of antibiotics to KFC.

A subsequent investigation by the Shanghai Munici­pal Food Safety Office revealed that excessive antibiotics had been found in eight out of 19 batches of raw chicken from the company in 2010 and 2011.

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