“BEIJING KFC launched a campaign Monday to rebuild its battered brand in China, promising tighter quality control after a scandal over misuse of drugs by its poultry suppliers.
The company, a unit of Yum Brands Inc. (YUM), promised to test meat for banned drugs, strengthen oversight of farmers and encourage them to improve their technology. It said more than 1,000 small producers used by its 25 poultry suppliers have been eliminated from its network.
KFC, which is China’s biggest fast-food chain with more than 4,000 outlets, was hit hard when state television reported in December that some suppliers violated rules on the use of drugs to fatten chickens. The company estimates January sales plunged 37 percent.
“Starting now, we will stress strict management and the principle of zero tolerance in food safety,” Sam Sun, the chairman of Yum Restaurants China, said at a news conference. “We will immediately drop any supplier that lacks the determination or the ability to manage breeding well.”
The complaint against KFC was less serious than other product scandals in China over the past decade in which infants, hospital patients and others have been killed by phony or adulterated milk powder, drugs and other goods. But KFC’s high profile attracted attention, and its status as a foreign company with less political influence meant Chinese media could publicize its troubles more freely.
Yum, based in Louisville, Kentucky, said it expects sales in China to tumble by up to 25 percent in the current quarter. The company also owns Pizza Hut and Taco Bell.
Chen Hao, a stock market analyst who was having lunch at an outlet of the Japanese chain Yoshinoya in Shanghai, said Monday the KFC scandal soured him on the whole fast food industry….”
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