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Yum Brands apologizes for KFC chicken scare in China

January 10, 2013|By David Pierson
  • A customer places an order at a KFC restaurant in Beijing.
A customer places an order at a KFC restaurant in Beijing. (Nelson Ching / Bloomberg )

BEIJING -- Fast-food giant KFC's parent company, Yum Brands Inc., has apologized to Chinese consumers in connection with a tainted-chicken scare that has hurt sales in the company's leading market.

Yum blamed a breakdown in its supply chain and said it didn't notify regulators fast enough about high levels of antiviral drugs and hormones used to speed-up growth in some of its poultry.

"We regret our failures, and on behalf of Yum China, I apologize sincerely to everyone," Sam Su, Yum China's chief executive said in a statement posted on the company's official micro-blog Thursday.

Yum said Monday that its fourth-quarter China sales would likely fall 6% rather than its previous forecast of 4% because of the negative publicity associated with the scare.

The Louisville, Ky.-based company owns KFC, Pizza Hut and Taco Bell and derives nearly half of its revenue from China.

Quiz: How well do you remember 2012?

News of the tainted meat was first reported on Dec. 18 by the official China Central Television, which conducted a one-year undercover investigation of suppliers in eastern Shandong province. 

Farmers told the broadcaster that some birds would grow too fat to walk because of the hormones they were fed. A steady cocktail of antibiotics ensured they stayed healthy.

The birds were being sold to suppliers linked to KFC and McDonald's. Both chains said they had cut ties with the suppliers.

Food safety is hyper-sensitive in China because of recurring scandals, especially involving meat and dairy products.

Despite being fast food, brands such as KFC and McDonald's have succeeded in China, marketing themselves as healthy dining because foreign restaurant chains are considered cleaner.

Yum is the largest foreign restaurant operator in China, with 5,100 KFCs and Pizza Huts. McDonald's plans to operate 2,000 stores by the end of this year.

Yum said it was working to rebuild the confidence of Chinese consumers by improving its internal communication and relationship with suppliers.

"We will use our actions to win people’s support back," the company statement said. "We will ensure everyone can eat safe chicken at KFC."

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