It’s been more than a year since a major food safety scare hit western fast-food operators in China, so we were probably overdue for the latest scandal that is now consuming leading chains KFC (NYSE: YUM) and McDonald’s (NYSE: MCD). Frankly speaking, Chinese consumers are probably so jaded about food safety scandals by now that I don’t know if these latest 2 will really have much long-term impact on either company.
The most disgraceful element this time is the fact that the supplier at the heart of the latest scandal is a foreign-owned firm. Up until now, most of the suppliers who provided tainted food to big foreign supermarkets and restaurant chains were domestic Chinese firms, which usually have lower quality control standards. Thus this latest scandal could really do some damage to the broader image of foreign-owned companies, which are generally seen as more trustworthy than their Chinese peers. Read Full Post…
China’s campaign to clean up its fragmented and scandal-plagued food industry has gotten a boost on the meat front, with word of a new tie-up between national grains giant COFCO and global private equity giants KKR and Baring Private Equity Asia. This latest move is part of Beijing’s growing effort to bring in foreign expertise to create a handful of major food groups that can ensure product quality and food safety. Unfortunately, nearly all the major giants now emerging are big state-run companies, meaning most of these firms are likely to be quite bureaucratic and most won’t be available to foreign stock buyers. Read Full Post…
Shanghai eatery gets diners hooked with poppy seeds
I thought I’d read about every kind of food safety scandal imaginable until I saw a new report on an eatery here in Shanghai that found a creative way to encourage customer loyalty for its crayfish dishes. I had to smile to myself as I read the report, and even had to slightly admire this restaurant for its creative, albeit illegal, approach to building up repeat business.
At a broader level, this “Case of the cagey crayfish shop” shines a spotlight on a more widespread phenomenon in China that amuses both me and many of my western friends. Put simply, we marvel at the inability of Chinese entrepreneurs to differentiate themselves from their rivals, with the result that many shops often look identical to one another and give little reason for customer loyalty. Read Full Post…
