Yum cutting some supplier ties after China food scare
Published on Feb 26, 2013 6:26 AM
BEIJING (REUTERS) - Yum Brands Inc said on Monday it will stop using more than 1,000 slaughterhouses in China as it moves to tighten food safety and reverse a sharp drop in business at KFC restaurants in its top market after a scare over contaminated chicken.
Diners began avoiding Kentucky-based Yum's nearly 5,300, mostly KFC, restaurants in China in December after news reports and government investigations in the Asian country focused on chemical residue found in a small portion of its chicken supply.
Yum was not fined by Chinese food safety authorities, but its restaurant sales in the country dropped and have yet to recover.
As a result, Yum warned this month that it expected 2013 earnings per share to contract, rather than grow.
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