雅思阅读精选：Quartz评论中国肯德基事件

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　　2012年12月24日雅思阅读精选：Quartz评论中国肯德基事件

　　Chinas food safety campaign against KFC is the real threat to Yum

　　When Yum Brands announced last month that it expected KFC-Chinas fourth-quarter sales to decline 4%, spurring a sharp sell-off in the companys stock, CEO David Novak attributed it the slump to the macrosmeaning, the much-discussed sputtering of Chinas economic growth.

　　But that wasnt the whole story. Days before Yums revised estimate, the Chinese state television network CCTV reported on KFCs sourcing of fast-growth chickens, birds dosed with toxic concoctions to shorten their maturation cycle. The Chinese micro-blogosphere promptly freaked out, but the charge didnt stick: Health inspectors cleared the fast-growth chickens, which turned out to be the overseas industry standard, imported from the United States.

　　But CCTV wasnt done. On Tuesday, it ran an investigative piece on large-scale chicken farmers, highlighting their insouciant way with antibiotics and growth hormones. Though KFC and McDonalds, which was also implicated, both say they havent sourced from those kinds of farms in months, it matters little to public perception. When it comes to food safety, these ongoing reporting campaigns are fairly common, explains Beijing-based lawyer and blogger Stan Abrams:

　　Seems like every other day Im writing something about a new investigation, enforcement campaign, or dispute involving a foreign firm here. Some times the criticism turns out to be fair, and other times the rumors are unfounded. Occasionally there are witch hunts, where the media piles on with inflammatory rhetoric, assuming the worst of multinationals and their business practices.

　　In this case, says Abrams, Chinas print media seem to be focused not on the farmers or their customers as a whole, but rather on KFC and McDonalds. For example, the China Daily has now begun rehashing KFC- and McDonalds-related stories with titles like Multinational firms tricks and Some foreign fast food is harder to swallow.

　　This is fairly typical, particularly of CCTV, which sees itself as a consumer watchdog. What isnt typical is that the Chinese government is now taking up the cause against Yum and KFC. Earlier today, the Shanghai Food and Drug Administration released food safety reports from 2010 and 2011, showing that, of 19 samples from one of the farms profiled by CCTV, 8 failed antibiotics safety tests.

　　We think Yum Brands should face facts and responsibly publish relevant information, Shanghai FDA manager Yan Zuqiang told the 21st Century Business Herald. What is now clear is that weve already had in our hands eight reports of samples that didnt meet standards, and we immediately informed Yum Brands. Yum Brands should admit to this.

　　Though the report hasnt been widely published in English yet, the stock shed some 4% in trading on Friday. Yum Brands representatives did not respond to requests for comment.

　　Its not clear what the government hoped to clarify by releasing tests that more than a year old from a farm that KFC no longer uses, particularly when the Shanghai FDA says it will publish recent test results in a few days. Its possible this signals a prioritization of food safety in the new Xi Jinping administration, says Junheng Li, head of research at China-focused research firm JL Warren Capital, though she thinks that KFC-Chinas real problem has little to do with government attention.

　　KFC-China was successful back in the day because they localized their menu, adapting it to local taste, Li told me. Among younger demographics in first- and second-tier cities, chicken has been around for too long, so that now, trendy Chinese food concepts are outperforming KFC and other foreign fast foods.

　　Yums 5,000 restaurants in China are growing revenue faster than the companys larger base of locations in the US. But shopping centers are no longer discounting rents for KFCs, says Li, meaning that the company is facing 100-250% hikes, wringing margins. Then theres the reality that young shoppers are increasingly spending their renminbi online, where e-retailers like Taobao and 360buy.com offer selection, price transparency, and convenience that traditional shopping centers struggle to compete with. KFC-Chinas plan to combat these trends is to expand in lower-tier cities, where markets are not yet saturated.

　　But Li sees problems with this strategy, a point that gets back to the macros that CEO Novak believes will support KFC-Chinas continued growth.

　　KFC shares the common attitude toward China, saying urbanization will drive growth, and leaving it at that, she says. Urbanization isnt the driver of economic growth; its the result of it. You have to create jobs first. And with the economy so dependent on exports and investment, creating overcapacity, the current rate of urbanization is unsustainable.