Tags: Yum | China | Sales | Food | Safety

Yum Sees New Downturn in China Sales after Food Safety Scare

Wednesday, 03 Sep 2014 05:35 PM

Yum Brands Inc. estimated same-store sales in China fell about 13 percent in the third quarter as a result of a food safety scare in July when a former supplier was said to have improperly handled meat and used expired food.

The company's shares fell 4.3 percent at $68.40 in trading after the bell on Wednesday.

"Since July 21st, Yum Brands' China division has experienced a significant, negative impact to sales at both KFC and Pizza Hut following adverse publicity regarding improper food handling practices by former supplier, Shanghai Husi," the company said in a filing.

"While sales are beginning to rebound, they continue to be negative."

The food safety scare in China was triggered by a TV report showing improper meat handling by a supplier, Shanghai Husi Food, a division of U.S. meat supplier OSI Group LLC.

Yum plans to "vigorously" pursue legal action against OSI and Husi to recover damages from the incident, the company said.

© 2017 Thomson/Reuters. All rights reserved.

 
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Yum Brands Inc. estimated same-store sales in China fell about 13 percent in the third quarter as a result of a food safety scare in July when a former supplier was said to have improperly handled meat and used expired food.
Yum, China, Sales, Food, Safety
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2014-35-03
Wednesday, 03 Sep 2014 05:35 PM
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