* Yum apologises for inspection shortcomings, lack of
* Yum gets more than half of total revenue from China
* Yum says bad publicity in China hit 4Q sales harder than
SHANGHAI, Jan 10 Fast-food chain KFC's parent
Yum Brands Inc apologised to customers in China over its
handling of a recent food scare that has hit the company's sales
in its biggest market.
"We regret shortcomings in our self-checking process, a lack
of internal communication," Su Jingshi, chairman and chief
executive of Yum China, wrote on the company's Weibo microblog.
Yum, which gets more than half of its revenue and operating
profit from China, warned on Monday that bad publicity from the
safety review of its chicken suppliers had hit sales in China
harder than expected in the fourth quarter.
Subsequent findings by the Shanghai Food and Drug
Administration found the levels of antibiotics and steroids in
Yum's current batch of KFC chicken supply were safe, though the
watchdog found a suspicious level of an antiviral drug in one of
the eight samples tested.
The scandal erupted when the official China Central
Television reported in late December that some of the chicken
supplied to KFC and McDonald's Corp contained excess
amounts of antiviral drugs and hormones used to accelerate
A spokesman for Yum told Reuters on Tuesday that the firm
had stopped using the two suppliers before the official probe
was announced, after its own random tests showed they were not
meeting Yum's own standards.
LACK OF TRANSPARENCY
Yum's Su also apologised for the company's failure to
actively report test results to the government and a lack of
transparency and speed in its external communication.
Nonetheless, the bad publicity has hurt KFC's image in
China, where Western brands are often regarded as safer and
higher quality than Chinese peers, an important factor as food
safety is often near the top of the list of consumer concerns.
"They do finally apologise now, but it's too late. I don't
know if other people will forgive them or not, but I certainly
won't!" wrote Jackson_Dong on popular microblog site Sina Weibo.
Yum, which has more than 5,100 restaurants in China and is
the largest Western restaurant operator in China, pulled some
products in 2005 because they contained "Sudan Red" dye, which
was banned from use in food due to concerns it could lead to an
increased risk of cancer.