KFC China food scare prompts official probe http://today.reuters.com/news/articleinvesting.aspx?type=companyNews&storyID=2007-03-10T055623Z_01_SHA16568_RTRIDST_0_KFC-CHINA-OIL.XML
Sat Mar 10, 2007
SHANGHAI, March 10 (Reuters) - Reports that U.S. fast food chain KFC is using a potentially harmful chemical in the cooking process at restaurants in China are being investigated by officials, the country's health ministry said.
The ministry will conduct an investigation to ensure the proper usage of magnesium silicate, or talc, in filters used to purify cooking oil, and examine any risks of using the chemical, the ministry said in a statement on Friday.
But it added that use of the chemical is allowed in food processing in China, despite recent reports in domestic media suggesting it may be harmful if consumed.
KFC, a unit of U.S. fast food group Yum Brands (YUM.N: Quote, Profile , Research), welcomed the ministry's announcement and said it would fully cooperate with the investigation carried out by the Chinese Center for Disease Control and Prevention.
"KFC China has always abided by strict rules and regulations to ensure the correct usage of magnesium silicate," the company said in a statement. McDonald's (MCD.N: Quote, Profile , Research), a leading rival of KFC in China and elsewhere, also uses magnesium silicate in the process to purify cooking oil, the Beijing Youth Daily reported on Saturday.
KFC, which has more than 1,700 restaurants in China and says that it is the largest and fastest-growing fast food chain in the country, came under scrutiny in 2005 after a possibly carcinogenic food dye was found in some of its chicken products.
Yum apologised and promised that the chemical had been removed from all its food processing.
Brand-name Western firms in other industries have also run into regulatory problems in China, but such issues are often resolved after discussions with Chinese regulators.
Procter & Gamble Co. (PG.N: Quote, Profile , Research) last September suspended sales of its SK-II skincare products after Chinese regulators said they contained trace levels of potentially harmful substances.
The U.S. household products giant chose to resume sales in some cities a month later after China's quality watchdog stated they the products were safe to use, but analysts said the SK-II brand had been hurt locally and would need time to recover.
In 2005, Swiss food giant Nestle (NESN.VX: Quote, Profile , Research) had to recall all milk powders with high iodine content.
Yum has about 2,000 KFC, Pizza Hut and Chinese-style East Dawning restaurants and earns nearly a third of its operating profit in China.
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