“Yum! Brands Inc. (YUM) and other foreign companies are “digging their own graves” in China by failing to ensure quality standards in the nation, the official Xinhua News Agency said in an editorial.
These companies “risk losing the profits they came to China to seek if they don’t correct their practices,” Xinhua said. The government is serious about cracking down on illegal activities by all companies, including international ones, according to the editorial.
Yum’s vice chairman apologized on Jan. 10 after the Shanghai Food and Drug Administration said in December it found antibiotic levels that didn’t meet prescribed standards in batches of chicken supplied to the Louisville, Kentucky-based company between 2010 to 2011. French hypermart chain Carrefour SA (CA) and Germany’s Volkswagen AG (VOW) were also singled out by Xinhua, which criticized multinational firms for “capitalizing on loopholes in Chinese law and regulations to escape punishment.”
“Yum’s understated apology is rooted in its arrogance and propensity for unfairly treating Chinese consumers, who usually regard foreign brands as being safer and of higher quality than domestic brands,” Xinhua wrote in the editorial.
Sam Su, vice chairman of the operator of KFC and Pizza Hut stores, said in a letter posted on KFC’s official microblog the company’s self-inspection processes and internal communications had been lacking. Amy Sherwood, Yum’s Kentucky-based spokeswoman, didn’t immediately respond to an e-mail sent by Bloomberg News after regular office hours….”
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