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WSJ: Yum! Brands Receives Shanghai Regulators' Support On Safety

The Shanghai Food and Drug Administration gave Yum! Brands Inc. (YUM) some shelter from criticism by China's state-run media of its food-safety practices, saying chicken sampled from the U.S. restaurant company's KFC arm complied with government limits on antibiotics, the Wall Street Journal reported.

However, the Shanghai Food and Drug Administration or SFDA is planning to conduct further investigations of potential food-safety violations by the company. The SFDA also reportedly said that tests showed what it called suspicious levels of an antiviral drug that will prompt additional attention.

In a filing with the U.S. Securities and Exchange Commission on Friday, the company said it is cooperating fully with the Chinese government's review of two poultry suppliers who provided chicken with unapproved levels of antibiotics to KFC. These suppliers represent an extremely small percentage of product to KFC. As such, the company does not anticipate a shortage of product supply. Recent publicity has resulted in moderate sales impact the past few days.

Yum is undergoing investigations by the SFDA, which said tests conducted by a third-party agency from 2010 to 2011 found eight batches of chicken supplied by Liuhe Group Co. had levels of antibiotics that didn't meet prescribed standards.

Yum said it stopped buying chicken from Liuhe in August.

by RTT Staff Writer

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