SHANGHAI (REUTERS) - China's food safety watchdog has launched an investigation into local juice makers after a media report said they used rotten fruit to make their products.

The probe includes two branches of the country's sector leader, China Huiyuan Juice Group Ltd.

Farmers in several Chinese provinces sold rotten fruit to distributors, which was then bought by canned fruit producers and juice manufacturers to cut costs, the 21st Century Business Herald said in the report on Monday.

"We take this very seriously and have urgently deployed food safety teams in Anhui, Jiangsu, Shandong and other provinces to immediately open an investigation," the China Food and Drug Administration (CFDA) said in a statement on their website, seen by Reuters on Tuesday.

Food safety is a serious topic in China where scandals from milk laced with industrial chemicals to recycled "gutter oil" for cooking have left many consumers wary.

A recent Pew Research report said almost four in 10 Chinese people felt that food safety was a "very big problem".

Huiyuan, once an acquisition target for The Coca-Cola Co , said that after an initial probe there was no evidence that the company had used rotten fruit to make its juice, according to a statement on its website.

The CFDA added Huiyuan's Shandong unit had not produced any juice since the end of last year, while it had not yet found any rotten fruit on site at the company's Beijing branch. It added that there was as yet no evidence of rotten fruit at the Anhui unit of China Haisheng Juice Holdings Co Ltd or at the Jiangsu unit of Yantai North Andre Juice Co Ltd.

China's poor food safety record has hurt global firms such as KFC parent Yum Brands Inc, while local milk powder makers have struggled to shrug off a deadly melamine scandal in 2008 which led to the deaths of at least six babies. Melamine, which is used in plastics production among other things, was added to milk formula to fraudulently boost protein levels.

To deal with food security, China has expanded a pilot system that tracks the movement of meat and vegetables to the supermarket shelf.

Shares in Huiyuan were up 3 percent at midday, rebounding after falling to a three-week low in trading on Monday.