Yum blindsided by KFC chicken scare in China (KFC take steps to recover Scandal in China)

Yum blindsided by KFC chicken scare in China (KFC  take steps to recover Scandal in China)

February 5, 2013

NEW YORK (AP) — When KFC was hit by a controversy over its chicken suppliers in China late last year, parent company Yum Brands offered free drinks and ice cream to bring diners back.

"The onslaught of negative media coverage has been longer lasting and more impactful than we expected," CEO David Novak said in a conference call with investors Tuesday. Although Novak said he expects the KFC brand to recover eventually, he could not say exactly when that would be.

He noted that the company will need the "gift of time" for the controversy to subside, because diners have plenty of other places where they can go while the issue is fresh in their minds. Yum said it plans to mount a marketing campaign to start rebuilding trust next week, after the Chinese New Year.

Since Dec. 18, however, the company has been reeling from a report on Chinese television that said its suppliers were ignoring regulations and giving chickens unapproved levels of antibiotics. Yum says a subsequent investigation by Shanghai regulators concluded on Jan. 25, with the company agreeing to adopt stricter oversight of its suppliers.



Resource: http://finance.yahoo.com/news/yum-blindsided-kfc-chicken-scare-china-191806693--finance.html