Yum! knew of drugs

The China Division of Yum! Brands Inc, operator of the US fast food chain KFC in China, stated Friday that it bore no obligation to inform the government of safety problems in its former raw chicken supplier Liuhe Group, which was found by Yum! in 2010 and 2011 to be supplying tainted chicken.

This announcement came after domestic media alleged on December 20 that Yum! had found excessive antibiotic drugs two years ago in raw chicken supplied by Liuhe, but neither let the public know nor recalled the tainted chicken.

The Shandong-based Liuhe has supplied raw chicken to fast food chains including KFC and McDonald's in China, although they no longer do so. One Liuhe factory has been shut down after China Central Television reported on December 18 that it had sold chickens containing excess antibiotics and even forbidden antiviral drugs.

According to Chinese laws and regulations, the company is not obliged to publish the results of tests it conducts itself on its raw materials, said Yum! on Friday, adding that it had no intention of concealing Liuhe's wrongdoings.

Although domestic catering firms do not need to inform the government or the public of safety problems found in their raw material suppliers, they should change suppliers immediately if a problem is detected, Fan Jie, an analyst from Adfaith Management Consulting, told the Global Times Sunday.

Yum! failed to do so in China after internal testing found Liuhe's raw chickens to contain excessive antibiotic traces in 2010 and 2011, said Fan.

Starting from 2005, the company's bimonthly self-testing has been carried out by a third party, the Shanghai Institute for Food and Drug Control (SIFDC), an affiliate of the Shanghai Food and Drug Administration (SFDA).

The SIFDC's inspections in 2010 and 2011 indicated that eight out of 19 samples sent by Yum! contained excessive traces of antibiotics, the SFDA said on December 20, noting that the SIFDC did not report these results immediately and further investigation into the case is ongoing.

Firms operating in China, especially industry leaders like KFC, should pay more attention to "ethical duty" such as information disclosure, otherwise the company may risk losing loyal consumers, Liu Baocheng, director of the Center for International Business Ethics at the University of International Business and Economics, told the Global Times.

"Before CCTV's report, I was told that KFC's chickens are fed with antibiotics, which I only half believed. But now I feel cheated," a Beijing resident, surnamed Yuan, told the Global Times Sunday.

Fan said that sales of KFC and McDonald's have already been influenced negatively by the Liuhe food scandal. Neither of the two companies could be reached Sunday.

The SFDA sent staff members on December 18 to inspect the raw chicken in Yum!'s Shanghai warehouse, which CCTV reported to be one place Liuhe had sent the tainted meat. Preliminary testing found a substance that the SFDA suspects is amantadine, a forbidden veterinary drug, the SFDA said in a statement on its website on December 21. Further testing is needed to confirm the finding.