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Yum cutting some supplier ties after China food scare

Published on Feb 26, 2013 6:26 AM
 
A woman walks out a KFC restaurant in Beijing on Feb 25, 2013. 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. -- FILE PHOTO: REUTERS

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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