Bakery chain BreadTalk has come under fire from a China TV programme over claims its Shenzhen outlet has not changed its doughnut frying oil for years.
The outlet, a franchise, was also accused of replacing expiry date labels when various ingredients expired. The uproar came just days after the firm here was found to have sold Yeo's brand soya milk repackaged as "fresh" soya milk.
BreadTalk founder George Quek, 58, has denied the shocking findings of the secretly shot video by an undercover reporter of the Shenzhen TV programme. On Aug 13, government officials inspected the outlet and said practices there complied with regulations.
Still, the incident has taken a heavy toll on BreadTalk, Mr Quek told The Straits Times yesterday.
"Our share prices dropped. Business has also been affected in some of our outlets," Mr Quek said in Mandarin. "The health authorities in certain cities also conducted checks at our outlets.
"BreadTalk is a popular brand. I often visit Shenzhen and Guangzhou, and friends would tell me BreadTalk is great," added Mr Quek who set up the first BreadTalk shop in China in 2003.
Our share prices dropped. Business has also been affected in some of our outlets.
BREADTALK FOUNDER GEORGE QUEK, on the damage the report has caused
The firm has 405 BreadTalk outlets across China, of which 80 per cent are franchised. The mainboard-listed BreadTalk Group reported a 10 per cent rise in second-quarter net profit to $2.9 million.
The TV programme, which aired on Aug 12, showed an undercover reporter working in a BreadTalk franchised outlet in Shenzhen Coastal City. The reporter had installed a hidden camera in the store and recorded an employee saying: "The oil is used repeatedly and we will add new oil into the tank if it's not enough."
It also showed employees having different answers when asked if the ice cubes were made from tap water or filtered water. Denying the allegations, Mr Quek claimed that the tap water went through two filter systems, before it was used to make ice cubes.
Branding the allegations "evil", Mr Quek said the undercover reporter was out to mislead people. "I feel wronged," he told The Straits Times. The oil used for frying the doughnuts, the only deep-fried product in the shop, needs to be changed every three days, but the outlet staff would normally change it after one or two days.
The changing of oil would be recorded in a log book and signed by a staff member after inspecting it. Mr Quek said the undercover reporter was one of the staff members who signed the log book.
He said the undercover journalist worked in the outlet for 10 days. After the programme was aired, BreadTalk tried to contact the journalist but he was initially unreachable. Three days later, the reporter gave BreadTalk a chance to clarify the matter. BreadTalk took it in good faith and spent some time explaining the operations. But the edited programme again turned out to be misleading.
Asked if he would pursue legal action, Mr Quek said he has no such intention. "I do not want to provoke them. I am worried what they are capable of doing. We are a foreign brand to them. We have worked so hard to build our brand. I don't think I personally have an enemy, but I don't know if there is any jealousy among others."