Yum Brands Cleared in China’s Questionable Meat Probe

by Christopher Freeburn | May 10, 2013 9:57 am

ChinaFlag[1]On Friday, the Shanghai Municipal Food Safety Committee (SMFSC) reversed an earlier statement on its website[2] that accused Yum! Brands (NYSE:YUM[3]) of using meat products of uncertain origins at its restaurants.

Earlier this week, the SMFSC had issued a statement alleging that improperly labeled lamb meat had been delivered to the Little Sheep Group, a chain of restaurants owned by Yum Brands. The SMFSC now says that its previous statement was in error and that meat was sold to small individual businesses, not large restaurant chains, the Wall Street Journal noted.

Yum! Brands says it does not have any record of purchasing the affected meat.

Inspected seized meat labeled as New Zealand Sliced Lamb, which was determined to consist of a combination of lamb, duck and pork. Meat actually sent to Little Sheep Group is still undergoing tests.

Food safety scandals are common in China. In December, Yum! Brands’ KFC chain was hit with allegations that some of its poultry suppliers were using growth hormones and drugs to increase the size of chickens[4] in violation of Chinese law.

The scandal hurt Yum’s Chinese sales[5]. The company reported a 41% drop in operating profit from Chinese operations during the first quarter.

Shares of Yum! Brands rose fractionally in Friday morning trading.

  1. [Image]: https://investorplace.com/wp-content/uploads/2012/04/ChinaFlag.jpg
  2. reversed an earlier statement on its website: http://online.wsj.com/article/SB10001424127887323744604578474520588079416.html
  3. YUM: http://studio-5.financialcontent.com/investplace/quote?Symbol=YUM
  4. were using growth hormones and drugs to increase the size of chickens: https://investorplace.com/2012/12/kfc-facing-media-claims-of-tainted-chicken/
  5. hurt Yum’s Chinese sales: https://investorplace.com/2013/02/how-kfc-plans-to-win-back-china-after-chicken-scandal/

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