Chinese shrug off bird flu fears to tuck into KFC

Yum's fried chicken restaurants, including KFC, form the largest fast-food chain in China. Picture / Reuters

LOS ANGELES - Yum Brands chief executive said yesterday Chinese consumers appear to be less concerned about eating chicken in the light of a deadly bird flu and the company's KFC business in that market had returned to "previous strong levels."

The fast-food company forecast a double-digit percentage sales increase at its fast-growing Chinese unit in the first quarter after nearly a year of sluggish growth.

"Consumers seem to be getting more and more used to all the press and becoming less and less concerned about eating fully cooked chicken, which we have been aggressively communicating is perfectly safe to eat," Yum chief executive David Novak told analysts.

Yum reported a 20 per cent drop in operating profit in its Chinese business. Concerns about the avian flu and a food safety scare at KFC in early 2005 have slowed sales growth in that market, where Yum's fried chicken restaurants form the largest fast-food chain.

But Yum also said that January sales in China appeared to have risen about 22 per cent, in line with the company's long-term target. First-quarter sales in that market were expected to be up about 12 per cent.

Yum also reported a quarterly profit before stock compensation expense that exceeded Wall Street forecasts, in part due to a lower tax rate and stronger-than-expected sales in the United States.

Net income for the fourth quarter ended December 31 fell to US$226 million ($333 million) from US$235 million a year earlier.

- REUTERS