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Crisis Management Case Analysis of KFC Sudan Red Incident
KFC Sudan red incident of thinking - -

KFC and McDonald's position in China's food and beverage industry is almost no Chinese companies can shake, the market's recognition and the sophistication of its means of operation, so that its share of China to remain high, but now comes the Sudan red problem, although the problem does not bring about the demise of the KFC, but there is one thing to think about, the safety crisis may bring about industry Giant give way, food safety in China has received a high degree of attention from the public, coupled with the role of the media, there may be a disaster in the future to some areas of China's food industry companies, so at present, China's enterprises in the enhancement of technology and scale of production at the same time to pay close attention to food safety and product safety, research and development is a piece of the can not be relaxed, in order to achieve long-term stability of the development.

KFC Sudan red incident began and ended

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<br> 05 February 18

<br> Britain found Sudan red in food, food shelves up to more than 500 kinds of

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<br> gt;05 Feb 23rd

<br> China's AQSIQ issued an urgent notice, focusing on checking and controlling Sudan Red 1 in imported products to prevent it from entering domestic distribution channels. Yum Brands, a subsidiary of KFC, immediately asked its suppliers to test the relevant seasonings and provide written confirmation.

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<br> 25 Feb 05

<br> Yum's supplier, Guangdong Zhongshan Kei Fu Fu Foods Company, sent a written reply confirming that the products it supplied did not contain Sudan Red

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<br>05 March 4, 2005

<br> Beijing municipal authorities detected Sudan Red No. 1 in Heinz Chili Sauce and confirmed that the Sudan Red came from Tian Yang in Guangzhou. Yum again asked all suppliers to continue to check the "Sudan Red One", and turned the focus to domestic raw materials.

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<br> March 15, 2005

<br> Trace amounts of Sudanese Red (No. 1) were found in KFC's New Orleans BBQ Wings and New Orleans BBQ Chicken Thigh Burger Seasonings

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<br> 3/16/05

<br> Yum asked all KFC restaurants nationwide to stop selling both New Orleans BBQ Wings and New Orleans Chicken Drumsticks. At the same time, internal processes were initiated to properly dispose of and destroy all remaining seasonings to prevent the problematic seasonings from being returned to the consumer channel. KFC China issued a "Statement on Sudan Red (No. 1)" through the media and restaurants to apologize to the public

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<br> 17 Mar 05

<br> Yum's QC personnel were at the KFC plant to further trace the Sudan Red issue when it was discovered. When further tracing the Sudan red in the factory, it was found in the production records that the spicy powder containing Sudan red provided by Hongfang Aroma Seasoning (Kunshan) Co., Ltd. had also been used before January 12, 2005 in some of the seasonings for KFC's Spicy Chicken Wings, Spicy Chicken Drumstick Burgers, and Powerful Chicken Rice Crackers. KFC immediately notified all restaurants to stop using a small amount of the remaining Keefe seasoning and replace it with the same seasoning from Taste of Beauty

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<br> 03/17/05

<br> Before Yum's seasoning swap of the above three products was handled, Beijing Import and Export Inspection and Quarantine Bureau sampled the batch of Sudanese Red Hot Powder at the Company's Wanhui restaurant sampled the batch of questionable seasonings

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<br> 03/18/05 The Beijing inspection report confirmed that the Kikkoman Seasonings contained Sudan Red. Although our company has passed professional tests to ensure that the new seasoning from Aji Hao Mei does not contain Sudan red, the Beijing Food Safety Coordination Office, in order to ensure the safety of the public, has requested our company to send the new seasoning to the Bureau for another test and must stop selling the 3 products immediately until the Bureau proves that they do not contain Sudan red. In order to comply with the instructions of the Beijing Municipal Food Safety Coordination Office, Beijing KFC had no choice but to suspend the sale of the 3 products.

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<br> 22 Mar 05

<br> The new seasoning was confirmed by the Beijing Food Safety Office to be free of Sudanese Red, and immediately Beijing resumed the sale of the three products - Spicy Chicken Wings, Spicy Chicken Thigh Burger, and Powerful Chicken Rice Flower;

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<br> 03/23/05

<br> New Orleans seasoning, which has been tested by the National Institute of Certification and Inspection to be free of Sudanese red, is ready to be used, and sales of the product resumed nationwide within three days

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<br> 03/28/05

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<br> 05/3/28/05 < /p>

<br> KFC held a press conference in 16 cities across the country, announcing that hundreds of KFC related items were tested by professional organizations and confirmed that all the products did not contain Sudan red. The company identified all the problems come from the Zhongshan base fast rich company's supplier Hongfang fragrant material (Kunshan) Co. Ltd. Hongfang had supplied two batches of chili powder containing Sudan red to KDF. Some of the chili powder from these two batches was used in KFC's New Orleans and Spicy products. At the meeting, KFC announced three food safety measures to prevent similar incidents in the future

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<br> April 6, 2005

<br> According to a report by China Central Television (CCTV)'s "Focus on Interviews". All of the KFC seasonings in the Sudan Red No. 1 can be traced back to the Guangdong Tianyang company. The company to industrial raw materials illegal counterfeit into food color enhancers, sold to Henan Zhumadian Yu Xiang Seasoning Co., Ltd. for chili powder processing; and then through the Anhui Yimen Moss Dried Co., Ltd. company packaging, sold to the Hongfang Aromatic Seasoning (Kunshan) Co., Ltd. and finally sold to the KFC supplier Keefy company, so that the mixture of KFC seasoning. This shows that from Tian Yang company to KFC, the interval between four companies.

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<br> Highlights of KFC's Sudan Red Incident

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<br> 1. What really happened?

<br> ;See The Beginning of the KFC Sudan Red Incident.

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<br>2. Why did KFC only find out about the problem with its own products nearly a month after Sudan Red was discovered abroad?

<br>Currently, there are about 1,513 food additives approved for use in China in 22 categories, and those not listed here are illegal. So there are thousands and thousands of substances that can be used as illegal additives. In the past, Sudan Red was so little known that all Chinese companies never tested for it. The country did not even have a standard for testing it. On February 23rd, we asked our suppliers to check themselves and received written confirmation that they did not contain Sudan Red. On March 4, we asked our suppliers to check again and started self-testing at the same time. However, China's ability to detect Sudan red is limited, so it took a long time.

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<br>3. Did KFC hide the truth?

<br> no. After discovering that Sudanese red had been mixed into our seasonings on March 15, KFC immediately stopped selling the two products in question on March 16 and issued an announcement to consumers.

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<br> Integrity is Yum's business principle. Being responsible to consumers is a basic expression of corporate integrity. After the discovery of the Sudan red problem, Yum's first consideration was to stop selling the product in question, to protect the interests of consumers, and to comply with China's food safety regulations as well as consumers' right to know. Although this will have a temporary impact on the company, we believe that consumers will support Yum's approach and recognize the integrity of the company.

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<br>4. Why were three other products found in Beijing? Although this batch of seasoning was only a small part of the same seasoning, we still immediately pulled out the entire batch. It just so happens that the Beijing Food Office also found that batch of seasoning at the same time. In particular, we would like to clarify that some media reports claimed that KFC's statement on March 16th guaranteed that other food products do not contain Sudanese Red. This is incorrect. When we stopped selling the product at the first opportunity, we were unable to confirm that the product was known to be "red". We are committed to tracking down all other products to determine if they are "red" or not.

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<br>5. Are all the products now confirmed to be free of Sudanese Red?

<br> Yes. After the incident, we conducted comprehensive tests on hundreds of items. The results confirmed that all products are free of Sudanese Red. Since March 23rd, all discontinued products have been restored. Please feel free to use them.

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<br>6. Will anyone get sick or get cancer as a result?

<br> Absolutely not. The levels of Sudanese red in food are extremely low, and the impact on public health is negligible. That said, we should still keep it out of food.

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<br> According to an announcement by China's Ministry of Health, Sudan Red has the potential to cause cancer in animals, but there is no evidence of harm to humans. In animal testing, scientists have given animals doses of Sudanese red that are 100,000-1,000,000 times the amount of Sudanese red in food. So it is unlikely that the tiny amounts of Sudanese red that people eat will have any effect on their bodies.

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<br> British experts say the levels of Sudanese red currently found in food are so low that the effects are equivalent to a person smoking a cigarette for the rest of their life. Chinese newspapers say one cigarette is more harmful than hundreds of bottles of sultana-containing chili sauce.

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<br> Dr. Scott Philips, a leading toxicologist in the United States, believes that because of the extremely low levels of Sudanese red in food, the average consumer would need to eat 54,000 chicken wings a day for the rest of their life to have some possible effect on their health. According to the International Agency for Research on Cancer (IARC), sultanas are not carcinogenic to humans, he said.

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<br>7. Why would a company as big as KFC use fake food additives from a "roadside" company like Guangdong Tianyang?

<br>We would never buy from a company like Tian Yang ourselves. It was only after the incident that we realized it was a supplier four layers down that had purchased the illegal food additives from TAYO. Our current global regulations only monitor the management mechanisms of direct suppliers for their own supply systems. In the future, we will minimize the supply chain and strengthen the access system of each supplier. We also call on the government to strengthen the food industry's access and annual inspection system. Stop unscrupulous vendors from mixing in at the root.

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<br>8. What are KFC's future improvements?

<br> In view of the current food industry in China in general there are large food safety hazards. We have decided to take more precautions regarding food safety in China than any other company or country. We are working on the following:

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<br> invest no less than 2 million yuan to set up a modern food safety testing and research center, all products and raw materials for safety sampling. Use its own ability to ensure that all KFC products comply with food quality and safety standards;

<br> 1. Require all major suppliers to increase personnel, acquire the necessary testing equipment, and conduct the necessary food safety sampling of all incoming materials

<br> inspections, and enhance the testing capabilities of suppliers;

<br> 2. Require suppliers to be more rigorous in their selection of upstream suppliers, preventing suppliers who lack a sense of compliance and are unable to adhere to food safety

<br> from mixing into the supply chain, and strengthening control over upstream suppliers.

<br> 3. In addition, we will actively expand cooperation with the government, and work together with the government to improve China's food safety management mechanism

<br> a share of corporate power.

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<br> For the time being, we are not considering a change in our previous policy of aggressively shifting from imported to domestically sourced ingredients, but we will be more careful.

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<br>9. Why didn't KFC take these steps earlier?

<br>Modern society has entered a system of interdependence and high division of labor. In such a system, food safety must rely on the government's legislation, law enforcement, as well as the initiative of each enterprise to comply with the law in order to have a guarantee. No matter how powerful Yum Yum is, it is difficult to replace the self-regulatory function of all governments and suppliers. Moreover, we use tens of thousands of raw materials, involving a variety of fields, and the law does not allow the use or intrusion of a variety of biological, chemical, physical substances are numerous, and even some unknown, if you rely on a company to ensure that all the upstream supply chain is not a problem, like Don Quixote challenge the windmill, it is impossible. It is for this reason that catering companies, both domestic and foreign, have contractually delegated responsibility to their suppliers, requiring them to take targeted precautions according to their area of specialization. Therefore, we this time to build their own food safety testing and research center is really China, even the world's first.

<br> It is worth noting that in this incident, many famous international and domestic brands, including our competitors, have been found to have Sudan red ingredients. It can be seen in today's society to put an end to the invasion of illegal substances is not easy. Although it is not easy to completely eliminate, we still will not give up, we will take this as a challenge, with the government, academia, suppliers and other aspects of *** with the research, explore better ways to build more for consumers a few lines of defense, more gatekeeper.

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<br>10. Is it possible to guarantee that similar problems will not occur in the future?

<br>As stated above, no one can guarantee that there will never be a problem, but we will do everything we can to minimize the chances of a problem occurring to near zero.

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<br>11. Will KFC hold upstream manufacturers accountable?

<br>The direct supplier in question is Keefe, a multinational company that has had an extensive business relationship with Yum Global for many years. In this case, however, KF has failed to perform its duties as a gatekeeper and has clearly violated its contractual provisions, resulting in significant losses to our company. We will be negotiating with KFW for compensation. At the same time, we are also in the process of reviewing and adjusting our supply relationship with KDF.

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<br>12. What does KFC have to say to consumers?

<br>We understand that this incident has caused psychological upset to consumers and we y regret it. However, we hope that consumers will understand scientifically that Sudanese red contains very little toxicity and that exposure to trace amounts will not cause harm to the human body.

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<br> In this incident, KFC was unfortunately implicated by unscrupulous manufacturers many floors apart, and suffered the biggest blow since entering China. I hope consumers will understand this.

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<br> If a consumer insists on making a claim, we recommend that the consumer consult with a lawyer and follow the procedures prescribed by law. KFC will never shirk its responsibility under the law.

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<br>13. Why does KFC not take the initiative to issue invoices?

<br>1. KFC respects the rights of consumers, and if consumers request an invoice, we will issue one;

<br>2. The vast majority of consumers have no need for such small invoices, and if they do, they will just throw them away, and issuing an invoice takes up a certain amount of time, which is important to fast food customers. The speed of the fast food restaurant customers on the contrary, the formation of inconvenience.

<br> 3. KFC's above behavior is in line with Chinese law. At the same time, KFC pays all taxes according to the actual turnover, and has nothing to do with the invoice

<br> the amount of money written. Over the years, KFC's tax payment reputation is excellent, and has been recognized and rewarded by the national and local governments for many times.