KFC, which is owned by Yum! experienced a greater decline in same-store sales than forecast as a result, it claimed of “adverse publicity associated with a government review of China poultry supply”. Sales fell in China by 6%, compared with a projection of 4%.
The Shanghai Food and Drug Administration on 20 December said tests conducted by a third-party agency from 2010 to 2011 found eight batches of chicken supplied to Yum! by Liuhe Group had levels of antibiotics that didn’t meet prescribed standards.
Yum!, which operates KFC and Pizza Hut chains in China, got 44% of its revenue from the Asian nation in 2011. The company said that it stopped all supplies from Liuhe in August.
Analysts have warned that food safety is a big worry for many Chinese consumers and the impact of the probe may take months to reverse.
