Chinese poultry producer Liuhe Group Co is back to normal operations but with strengthened protocols, its controlling shareholder said, after being named for supplying chicken with excessive antibiotics to KFC.
In December, state television reported that poultry suppliers to fast-food chain KFC had fed chickens drugs and hormones to accelerate growth. Chinese food safety authorities also said they had found excessive amounts of antibiotics in samples tested from 2010 and 2011.
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Yum Brands Inc, which owns KFC, has blamed the food safety scare for cutting same-store sales by 25 percent in the first two months of the year. It releases its February sales figures later on Monday.
"This has been a very big lesson for us that we need to pay attention to and increase food safety efforts," Liu Yonghao, founder of China's largest private agribusiness New Hope Group, told reporters on Monday. New Hope, China's top feed producer, owns Liuhe, one of China's largest chicken producers.
Liu said the excessive antibiotics were tracked to independent chicken breeders who supply Liuhe, not to poultry raised by Liuhe itself.
"Some breeders used too much antibiotics or medicines. These non-standard materials got into the supply chain, and the media reported on it," Liu said.
Yum said in January it had stopped sourcing from Liuhe in August and had stopped sourcing from a plant run by Yingtai Food Group before state television aired its report.
Liu said, "We are already back to normal. All the plants are back online. What should be closed or fixed has already been closed or fixed, and our company has released a pledge to improve food safety measures."
He defended the practice, common to industrial breeders in China and North America, of raising chicks to adulthood in just over 40 days rather than the natural span of three to six months through feeding and light control in sealed coops. The technique requires careful disease control in the crowded flock.
"After a month of tests the market has been opened again. Whether in Beijing, Sichuan or Shandong, across China the market has been opened again. Following inspections, our product meets the standards," Liu said.
In an interview with Reuters in 2006, Liuhe executives said they had carefully studied the American poultry industry's practices for accelerated chicken raising.
Most of Yum's nearly 5,300 restaurants in China are KFCs.
(editing by Jane Baird)