Executive Briefings

Stung by Meat Safety Scare, Yum Brands Jettisons Some Suppliers in China

Yum Brands Inc. said is dropping some suppliers of its KFC restaurants in China as it tries to reassure consumers in that country who were scared off by a chicken safety scare last month.

The company on Monday unveiled a new set of quality control guidelines meant to rebuild trust in its brand after KFC's January sales in China plummeted amid reports of excessive levels of antibiotics in the chain's chicken.

The action was hardly unexpected given the importance of the Chinese market to it. Yum last year derived 42 percent of its profit from China.

Now, the chain says it will boost oversight over its supply chain and impose stricter requirements on its poultry producers. The company also slashed more than a thousand smaller producers from its network, saying that those operations were difficult to regulate.

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The company on Monday unveiled a new set of quality control guidelines meant to rebuild trust in its brand after KFC's January sales in China plummeted amid reports of excessive levels of antibiotics in the chain's chicken.

The action was hardly unexpected given the importance of the Chinese market to it. Yum last year derived 42 percent of its profit from China.

Now, the chain says it will boost oversight over its supply chain and impose stricter requirements on its poultry producers. The company also slashed more than a thousand smaller producers from its network, saying that those operations were difficult to regulate.

Read Full Article