NEW BIRD FLU VIRUS HITS YUM! SALES IN CHINA

This is yet another recent post on the new "bird flu" virus in China - H7N9 - which appears to have mutated to also attack humans. How it is transmitted still remains a big question mark. At the moment, it seems it is through the bird-to-human route (not, human-to-human). But research is still ongoing. What is also ongoing in China, and which may spread to the rest of the world, is fear of eating Chinese poultry (see yesterday's post).

Yum! brands has just reported its quarterly earnings - which have dropped 13 per cent from a year ago. It blames this new bird flu outbreak and fear of eating chicken for the poor sales in China (down 20% in the last couple of months).

Yum operates more than 4,200 KFC restaurants in China, plus over 800 Pizza Huts. Initial popularity has suffered from several food safety concerns. In the last two weeks in 2012, China sales began falling as a result of fears about overly high hormone and antibiotic residue levels in the chicken that Yum! used. The contaminated chicken did indeed enter Yum! restaurants through two of its poultry suppliers (not all).

Now it's fear of the H7N9 virus. Bad luck for Yum! shareholders (of which I am not one, though I have considered it).

Is this fear justified? Well, not really - not if Yum! restaurants can be relied on - always, and without fail - to cook their chicken properly. After all, even if the virus is present in the chicken, it would be destroyed at high temperatures.

This is what Yum! has stressed in its security filing yesterday, quoting: "Within the past week, publicity associated with avian flu in China has had a significant, negative impact on KFC sales. Historically in these situations, we have educated consumers that properly cooked chicken is perfectly safe to eat, and we will continue to do so."

Have you been served undercooked chicken in a restaurant, or, at at that chicken takeout? I have been...Well...mistakes happen. That is what people are afraid of.

Good luck Yum! I wonder whether if the World Health Organization (WHO) experts will start testing China-KFC's food, or their poultry suppliers, for the virus. That is, if they ever pluck up the courage to go to China instead of staying safely put at their desks. (Apologies to my former client, but I couldn't resist that!).

To your good health,

TSF