KFC has launched a campaign to rebuild its brand in China, promising tighter quality control after an incident over misuse of drugs by its suppliers.
The company, a unit of Yum! Brands Inc., promised to test meat for banned drugs, strengthen oversight of farmers and encourage them to improve their technology. More than 1,000 small producers used by its 25 poultry suppliers have been eliminated from the Yum! Network, the company said.
KFC, which has more than 4,000 outlets in China, was hit hard when state television reported in December 2012 that some suppliers violated rules on the use of drugs. The company estimates January sales plunged 37 percent. "Starting now, we will stress strict management and the principle of zero tolerance in food safety," said Sam Sun, the chairman of Yum! Restaurants China. "We will immediately drop any supplier that lacks the determination or the ability to manage breeding well."
Yum, based in Louisville, Ky., said it expects sales in China to fall by up to 25 percent in the current quarter. The company also owns Pizza Hut and Taco Bell. The company plans to maintain its pace of new restaurant openings in China. Another 700 new sites are planned for 2013, with Yum! focusing more on cities outside Beijing, Shanghai, Guangzhou and Shenzhen where it sees greater potential for growth.