Rat in hotpot costs China chain $261m

A screen grab from a video posted on social media shows a customer picking a rat out of a hotpot with chopsticks. The clip went viral over the weekend and, by the close of trading on Tuesday, shares in the restaurant chain's parent company had slid a
A screen grab from a video posted on social media shows a customer picking a rat out of a hotpot with chopsticks. The clip went viral over the weekend and, by the close of trading on Tuesday, shares in the restaurant chain's parent company had slid almost 12.5 per cent.PHOTO: YOUTUBE

HONG KONG (NYTIMES) - At hotpot restaurants in China, most of the ingredients are relatively inexpensive.

For one Chinese restaurant chain, however, an item found by a customer at one of its outlets has proved to be particularly costly: a rat. A video of a small, dead rat - boiled, gelatinous and with its stunned arms outstretched - fished out of a vat of bubbling broth has shocked China and sent shares of a popular restaurant chain plummeting.

The rat was found last week at a branch of the chain Xiabu Xiabu in Weifang, a city in the eastern province of Shandong.

A local newspaper reported the incident last Friday, and video footage of the customer picking the rat out with chopsticks circulated on Chinese social media all weekend.

By the close of trading on Tuesday, shares in the chain's parent company, Xiabuxiabu Catering Management, had fallen almost 12.5 per cent, at one point dropping to its lowest in nearly a year.

In all, the discovery of the rat had knocked about US$190 million (S$261 million) off the market value of the business, which is publicly traded in Hong Kong.

The company's shares recovered somewhat on Wednesday, gaining around 3 per cent.

Xiabu Xiabu initially released a statement last Saturday night saying that it had "ruled out the possibility that an unhygienic environment has caused the rat to appear", but that statement was later deleted.

A company representative, Ms Catherine Gao, later said that the chain was cooperating with the authorities.

"We have set up a task force to carry out an in-depth investigation into this incident, and will also invite third-party authorities to help us clarify the truth," she wrote in an e-mail.

Ms Gao said the chain had always taken great care over the quality and safety of its food.

The market supervision bureau - an official watchdog body - in Weifang has ordered the Xiabu Xiabu branch to suspend services for the sake of "improvement".

In a statement published on the Chinese messaging platform WeChat on Sunday, the bureau said that while it found no traces of rats, the restaurant had committed violations related to stagnant water and buying food from unlicensed suppliers.

Although the hotpot has gained in popularity in recent years, customers across China have complained about questionable hygiene standards at hotpot chains, particularly over restaurants reusing hotpot broth.

A version of this article appeared in the print edition of The Straits Times on September 14, 2018, with the headline 'Rat in hotpot costs China chain $261m'. Print Edition | Subscribe