Shanghai to Probe Yum Handling of Chicken That Failed Tests

Shanghai said it plans to investigate if Yum! Brands Inc. (YUM) properly dealt with test results that showed some chicken the company received from distributors contained excessive levels of antibiotics.

The Shanghai Food and Drug Administration said tests conducted by a third-party agency from 2010-2011 found eight batches of chicken supplied to Yum by Liuhe Group Co. had levels of antibiotics that didn’t meet prescribed standards. Yum, which operates the KFC and Pizza Hut chains in China, was made aware of these results, the agency said on its website yesterday.

State-broadcaster China Central Television prompted greater scrutiny of the nation’s poultry industry this week when it reported suppliers including Liuhe weren’t properly inspecting chicken bought from farmers in Shandong province for antibiotics and hormones. Yum, in a statement posted on its official KFC microblog in China, said after the CCTV report that it stopped buying from Liuhe in August this year.

Yum spokeswomen Amy Sherwood and Virginia Ferguson didn’t immediately respond to an e-mail today seeking comment.

To contact Bloomberg News staff for this story: Penny Peng in Beijing at ppeng18@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net