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Tue 22nd Jul 2014 - Propel Tuesday News Briefing

Story of the Day:

BrewDog gets mixed reception for new packaging designs, promises to seek feedback on the rest of its redesign: Scottish brewer and retailer BrewDog has admitted it has received mixed reviews for its new packaging on its blog and on Facebook – and will ask its customers for feedback on the rest of the re-design project, which is only 25% complete. On his blog, co-founder James Watt told customers and shareholders: “After the mixed feedback (some amazing, some not so amazing) on Friday to our new Headliner labels, I thought I would post a detailed response running through the project overall and also letting you all help with the next steps on it. We wanted to change because we felt the old labels were no longer quite right for us as a brewery. After seven years we felt they had become a bit too young, a bit neon and a bit tacky. Although they stood out, they did not reflect the craft heart and soul of our beer. It is still tough though, and the first time I saw any of the designs I did not like them. This is because I have been so caught up with the current packaging over the last seven years that just looking at any new design was a shock. However, after myself and our team spent time with them, we all felt completely committed to the evolution of the packaging and branding and we all, after a little time, loved the new designs. This is also not something we have taken lightly or done quickly. We had seven agencies from three different countries pitch us designs and concepts and we worked with our chosen agency for over three months to develop the final packaging and branding. We also should have got a little bit more feedback from you guys earlier in the design process. However, the bottle design process is now just 25% complete – we still have to design the Amplified range, the small batch range and also the new Abstrakt packaging is still yet to be designed. We have decided to do this collaboratively with our customers and get your feedback on all of these developments.”

Industry News:

NPD Group – ‘every market we track shows increase in chain locations, decease in independents since 2007’: Insights firm NPD Group has reported that every foodservice market it tracks has shown the number of chain locations increase over the level for 2007, while the number of independent restaurant locations had decreased from the 2007 level. The research firm reported that the two North American foodservice markets America and Canada fell behind the traffic and spending growth recorded in several other countries in the first quarter of 2014. Russia recorded a 6.6% increase in total restaurant spending, much of it attributed to traffic growth. The nation’s average check of $7.55 per eater trailed only those for France, Australia and Germany, which were $8.29, $8.12 and $7.98, respectively. American brands with locations in Russia nervously watched how the market reacted to escalating tensions between the country and its neighbor Ukraine in the first quarter, as did major Russian franchisees like Rosinter Restaurants Holding, which reported low double-digit decreases in like-for-like sales during the first part of 2014. The UK saw a 2% growth in traffic in the first quarter, leading to a 3% increase overall in consumer spending for the restaurant industry. Germany’s spending growth for the quarter finished just behind at 2.9% while France’s total spending grew 1.5%. The firm noted that the troubled economies of Spain and Italy contributed to decreases in restaurant spending of 1.9% and 2.5%, respectively.

Spirit boss – nothing fundamentally wrong with leased pubs: Spirit Pub Company chief executive Mike Tye has told the Financial Times that there is nothing fundamentally wrong with the leased pub model and problems are linked to the overblown prices paid and the use of highly leveraged debt. “There is nothing wrong with a really good leased model,” said Tye. “It is only when you overstress it – with leverage and poor execution – that it creates a problem.”

Two York pubs listed as assets of community value: Two York pubs have been listed as assets of community value and included on a council register. Rawcliffe Parish has seen its application to have The Mitre on Shipton Road included on the register of community assets, while campaign group Save the Fox Inn has also had its application approved by the City of York. The ruling means neither pub could be sold without the local community first being given a six-month window of opportunity to bid for it. Since the community application for The Fox was first submitted the pub has been taken over and extensively renovated by Ossett Brewery while The Mitre, which is owned by Enterprise Inns, has seen a new landlord arrive.

Deloitte – consumers edging away from defensive spending: A report by Deloitte has found that net consumer spending on holidays and eating out rose in the second quarter of the year. A holiday spend index went up by three points in the second quarter of 2013, according to the latest Deloitte Consumer Tracker. Similarly, net spending on short breaks and eating out rose five points. People also expect their net spending on short breaks and eating out to rise over the current quarter. Graham Pickett, head of travel, hospitality and leisure at Deloitte, said: “Low inflation, or in some cases deflation, means that consumers should be getting better value for their money. Combined with the rising confidence in household disposable income, consumers are edging away from the defensive spending habits they adopted during the recessionary years and spending more on the things they enjoy.”

Company News:

New pizza concept opens in Hampshire town: A new pizza and mezze hybrid concept, Woodfire, which started as a pop-up shop, has been launched in Stockbridge, Hampshire by the owner of Stockbridge-based deli and bistro brand Thyme & Tides. The concept is a Mediterranean-themed restaurant specialising in mezze platters and handmade woodfired pizzas. Owner Sally Hemming said: “The launch of Woodfire is a really exciting time for us. We’ve had such a positive response to Thyme & Tides that we wanted to build on this success and open a second outlet but with a very different menu and atmosphere. When this site, the former Stokes restaurant, became available, I felt it was just too good an opportunity to miss. We operated as a pop-up for the first few weeks which was great fun and enabled us to receive valuable feedback from customers on what they’d like.” Manager Neil Downton said: “Woodfire is a fabulous new concept which brings together the ingredients and food cultures from the countries that border the Mediterranean. We’re offering an extensive menu that centres around pizza and mezze while also offering salads, main dishes, sweet treats and a kids menu. We serve breakfast, morning coffee, lunch, afternoon tea and cakes, right through to supper on Friday and Saturday evenings, so there’s something for everyone.”

Oakman reports strong First Quarter: Oakman Inns and Restaurants, the Tring-based pub company led by Peter Borg-Neal, have reported 11.1% sales growth in its first quarter, the thirteen weeks ending Sunday 6 July. Borg-Neal said: “As a team we are delighted with these numbers. They represent the fruits of a lot of hard work in the past nine months. What is particularly pleasing is that our comparable uninvested estate grew by 3.5% reflecting the underlying health of the business. We had feared something of a downturn during the soccer World Cup but instead have seen really encouraging growth with our new Spring / Summer menu being extremely well received. I see our future as being about moving through the gears rather than expanding too quickly. Whilst we have strengthened both our balance sheet and our human resources we must take care not to overstretch either of them. Externally I see the risk will be connected to occupancy costs as confidence returns to the sector. We are already seeing some worrying increases with some operators signing up to very high rental levels in London in particular. Unfortunately the misjudgments of some can queer the pitch for others. Let us hope that the government continues their excellent record of support for our sector by further tackling the scandal of Business Rates – which are taxation without representation. From an Oakman perspective we will continue to be disciplined and ensure we do not sign unsustainable leases. In the end, they neither serve lessee nor landlord.”

Loungers lines up Peterborough opening: Loungers, the cafe bar concept headed by Alex Reilley and Jake Bishop, is lining up an opening in Peterborough’s Cathedral Square area. Loungers is looking to take over the Barista coffee and pizza place on Bridge Street – and the vacant former NatWest bank office next door. It has submitted plans for the change of use of the office and the installation of new shop fronts and signage – featuring the name Argo Lounge.

Abokado acquires new London site: Abokado, the healthy eating brand led by Mark Lilley and backed by private equity firm Kings Park Capital, has acquired the lease on assignment of 36 Berners Street, formerly occupied by Italian cafe La Bottega. It is the company’s 23rd site and will open in September – it is located opposite the new Estee Lauder UK and European HQ. This latest site is the company’s fourth in Fitzrovia. The rent is £33,000 per annum and a premium of £45,000 was paid. The lease expires on 1 May 2028. The deal was secured through agent Cedar Dean Gilmarc.

Bella Italia to roll-out gelato cart: Bella Italia, the 90-strong brand that owner Tragus want to double in size, is to launch a gelato cart at its refurbished Reading Orcale site. Bella Italia is the first national restaurant chain to offer a full gelato cart at one its restaurants – and plans a UK-wide rollout. Last month, Tragus chief executive Steve Richards said: “We already have plans in place to open twelve new Bella Italia restaurants over the next year and expect over 50 more restaurants to open over the next five years.”

JD Wetherspoon’s Picture House plan would create Edinburgh’s largest pub: The Edinburgh Evening News has reported that the plan by JD Wetherspoon to convert live music venue The Picture House in Edinburgh into a pub would create the city’s largest license premises with a capacity of 1,000. The newspaper reported: “Over three levels, it could rival Cowgate landmark the Three Sisters as the Capital’s biggest boozer and eclipse mothballed proposals for a giant Waxy O’Connors pub with room for 910 drinkers in the Charlotte Baptist Chapel on Rose Street. Wetherspoon has also confirmed there will be no live bands or entertainment at the venue, lowering the curtain on decades of musical history at the site.”

Bubble N Shake opens second site at former McDonald’s in Chorley: Bubble N Shake has opened a second site, this time located at the former McDonald’s site on Market Street in Chorley which has undergone a £350,000 revamp. The brand serves bubble tea from Taiwan and milkshakes. Bubble N Shake is the brainchild of businessman Simon Liu who opened his first site in Huddersfield last year. He said: “I first came across bubble tea when I was on holiday in Taiwan three years ago and I knew it would be popular here. There are other bubble tea outlets in the UK but they are all in big cities. I opened my first in Huddersfield last year and Chorley is my second one – my aim is to open five in five different places over five years.”

Michelin-starred chef reveals details of central London restaurant: Michelin-starred Chef Skye Gyngell will open her first solo restaurant, Spring, in central London on 14 October. Spring will be located in Somerset House’s New Wing, the first time that this space will have been open to the public for more than 150 years. Gyngell’s menu offers eight starters, eight mains and five desserts, including cheese. Gyngell said: “I’m thrilled to be opening a restaurant in the very centre of London that will remain deeply in tune with the land and the seasons. My cooking has always been driven by a respect for beautiful ingredients, and I feel truly privileged that my first solo venture will allow me to share that pleasure with others every day in this historic setting. I hope this wonderful room will become the scene of many memorable, convivial meals.”

Rare 3am Kensington High Street license comes onto the market: A rare 3am nightclub licence on Kensington High Street in West London has come on the market through agent Davis Coffer Lyons. The unit is situated directly opposite celebrity hang out Bodo Schloss. The 2,000 sq ft basement unit, which has 18 years remaining on its lease at a passing rent of £65,000, is on the market for a premium in the region of £1.5m. Jonathan Moradoff, associate director at Davis Coffer Lyons, said: “This part of London is extremely desirable for the late night market and there is a dearth of venues that have the necessary licensing. This is a great unit in an excellent location.”

Skegness theme park owners buy King’s Lynn nightclub: Andy Mills-Brown and business partner Debbie King have re-opened the Heights nightclub in King’s Lynn having bought it a month ago. The pair already operate three other nightclubs across the UK as well as owning the Fantasy Island theme park in Skegness. Mills-Brown said: “There will certainly be more employment as we will be increasing our trading hours. Instead of two nights a week, we shall be open for three. One of these will be a gay night, as there is nothing similar at the moment locally, so it’s good for the community.”

Leicester Square nightclub operator expands into Norwich: REL Leisure, which operates No 1 in Leicester Square, London, has expanded into Norwich with the opening of Lost on the site of the former Essence nightclub on Prince of Wales. The club is set over two floors and will have two different rooms playing different music genres every weekend. Paul Gaul, sales and marketing manager of REL Leisure, said: “We are very excited to launch Lost in Norwich and we hope the acts we put on and the varied music we will play will attract a varied group to us.” REL has also applied to Norwich City Council for the use of the warehouse to the rear of the premises. The aim is to open it ahead of the university students’ return in September. Gaul added: “Warehouse dance halls have become increasingly popular in other areas of the UK, but will be a first for Norwich. The larger capacity venue will have three music rooms which will be able to put on regular top class acts.” REL Leisure will also be opening a second Lost site in Guildford, Surrey, in September and currently operate No 1 in Leicester Square, London

Liverpool restaurateur plans third opening: Liverpool chef Paul Askew is planning to open a third site, The Art School, in the city this autumn. Askew, who will still run the Hope Street Hotel and London Carriage Works, will open the venue in the lantern room of the Victorian 1888 Home for Destitute children building on Sugnall Street, just behind the Liverpool Philharmonic Hall. He said: “Any region, any great city, needs a culture of good food and we have a restaurant scene that is developing at an incredible rate of knots.” The new venue will offer a fine dining restaurant seating 50 diners, as well as a separate bar. It will be open from Tuesday to Saturday each week for lunch and dinner. The bar will serve Sacred Gin and Sacred Vodka exclusively as its house spirits and in their signature cocktail menu.

Stonegate Pub Company re-opens Bramwell Pub Company site in Coulsdon: Stonegate Pub Company has continued its investment in Bramwell Pub Company sites acquired in November last year with a £180,000 refurbishment of The Pembroke in Coulsdon. General manager ‘Junior’ Pearonau said: “Since acquiring the business, Stonegate have seen what a gem The Pembroke is and so were keen to invest in the pub to keep it looking smart. It’s been freshened up with new décor, signage, polished wooden flooring, furniture and artwork and looks stunning. We also have two raised areas suitable for staging or for private parties which gives us flexibility to host numerous events. As well as the physical changes we have tweaked our offer introducing a new and improved menu with a greater emphasis on traditional fayre and Sunday lunch.” New additions include lower calorie dishes such as Thai Style Yellow Chicken Curry (423 calories) or Broccoli and Brie Pasta Shells, at 476 calories, as well as new burgers – pulled pork burger and a Mexican inspired Nachos Grande Burger. The pub also re-opens with eight hand-pull cask ale pumps and one hand-pull cider pump.

Better burger brands takes permanent site in Truro: Better burger pop-up The Hub is taking a permanent site in Truro, taking over a premises traded as the One Eyed Cat. The Hub, which previously ran the Hub Box pop-up on Lemon Quay, is refurbishing the restaurant in the former chapel in Kenwyn Street to open this month. The Hub also has a permanent restaurant in St Ives and another Hub Box in Exeter. The Hub Box pop-up has been popular since it opened in a shipping container on Lemon Quay, selling burgers and hot dogs. It recently received planning permission to expand with an additional container.

Pub and smokehouse to open in Moseley: A new pub and smokehouse, the Dark Horse, is to open in Moseley this week, replacing the pop-up pizza restaurant Mo Dough at the Alcester Road building. Keith Marsden, who owns nearby pub The Prince of Wales, launched Mo Dough as a stop-gap while finalising plans for The Dark Horse. His team is removing the outdoor pizza oven and installing a new pizza oven in the back. There will be a large open kitchen with a smoker imported from the US and the menu will be focussed on ribs, chicken wings and homemade gourmet burgers with pizzas ‘back by popular demand’. The new venue will have a range of craft beers and real ales and a new range of spirits concentrating on bourbon.

Adam Hyman – Honest Burger opens seventh site: Restaurant consultant Adam Hyman has reported that Honest Burgers has opened its seventh site. In his weekly newsletter, he reported: “The burger chain, owned by Tom Barton and Phil Eles, has taken a site on Tooting High Street in south London. The Tooting venue will include a new drinks menu with a focus on British gins and new world craft beers. Honest Burgers opened its first site in 2011 in Brixton market.”

Chase Bar in Newcastle set for conversion: A Newcastle bar looks set to be converted into a multi-million pound luxury hotel, potentially creating more than 100 new jobs. The owners of the Vermont Hotel, Gainford Hotels, have submitted plans for the former Chase Bar, next to the base of the Tyne Bridge, which they hope to turn into a new “aparthotel” containing two penthouses, 11 suites, and a new nightspot. “The Quayside area is a beautiful place but it has been a little neglected,” Gainford Hotels director Imran Khaliq said. “Our main aim is to restore the heritage of the Quayside, which is already underway through the opening of news bars and restaurants and work on the Tune hotel.”

Dean’s Diner opens in Trowbridge: Dean’s Diner, operated by the Richoux Group, has opened at St Stephen’s Place Leisure Park in Trowbridge. The restaurant joined Nando’s, Prezzo, Frankie & Benny’s, Odeon and Premier Inn as the newest addition to the award-winning St Stephen’s Place, which was launched last year. Dean’s Diner will soon be joined Mexican restaurant Chiquito, which has been announced by Legal & General as the next addition to St Stephen’s Place Leisure Park. The chain is due to start fitting out in mid-July, with Chiquito occupying a 4,000 sq ft unit on a 25-year lease. It is expected to create 40 new jobs.

KFC launches more emotional adverts: KFC has launched a new multi platform marketing campaign which tells the story of a modern rodeo cowboy and his son as part of its strategy to create more “emotional” ads, Marketing Week has reported. The magazine added: “The BBH London-created campaign, which promotes KFC’s new Great American Bites range, was teased online late last week but launched on TV last night (21 July). The agency says the ad is based on the insight that KFC “has the power to replenish, both physically and emotionally”. Alongside the TV ad, the campaign is being activated on social media with a competition, created by Fabric, offering a fan the chance to win a holiday to America. The “Rodeo” campaign is the latest iteration of a new strategy implemented earlier this year, where the chicken shop has taken a more emotional approach to its marketing to drive deeper engagement with customers. Previously the fast food chain had produced product and provenance-led ads.”

Cornish comedian Jethro to sell cabaret club: Cornish comedian Jethro is to sell his cabaret club north of Tavistock on the border of Cornwall and West Devon. The comedy venue Jethro’s in Lewdown closed to the public in 2012 and will now be sold – along with everything inside. Jethro said: “The club is an icon from a wonderful period of comedy but that age of comedy is over now, times have changed. I’m 66 now, I don’t want to be going around all over the place. I’ve been doing three or four performances a week and travelling far too many miles. So it’s time to move on and get rid of all this stuff.” Jethro – whose real name is Geoffrey Rowe – founded the club in 1989 and it became a feature of the Cornish comedy circuit. He added: “The great acts I knew are gone and the new acts just aren’t for me. I am still doing theatre tours but without the extra workload I am able to enjoy my job again.” The club will go up for auction on 6 August, alongside a host of other furniture and memorabilia. Lots will include the stables where the performer once bred racehorses, signed cricket bats, chairs, paintings and a collection of whiskey bottles.

Young’s set to revive The Bull and Gate in Kentish Town: London pub retailer Young’s has won planning consent to re-model the Bull and Gate in Kentish Town, which has been closed for 18 months ago. Said Patrick Dardis, Young’s retail director, told a local newspaper: “The council committee recognised that it is clear that Young’s proposals will much enhance the venue, retaining and enhancing original features, bringing this historic, community pub back to life. The existing bar will remain, as will all the original features, including the wall, ceiling features and décor. The over bar, the bit that holds glasses directly above the bar, is from the 1970s (or even 80s) and will go. Don’t confuse that with the back bar, which is original and will stay. Elsewhere the plan is just to decorate existing features. The current loos will become additional bar space, with all-important features retained. A new ladies’ is moving to existing office space that was behind the bar, where no historical or important features exist. The main works will be refurbishing the virtually derelict back room: that was the music venue and any features that may have existed were removed many years ago. It’s in a shocking state, dirty and dark. This will be an extension of the pub, serving British food. The gents is moving upstairs into what was originally one room, with good features that many years ago were knocked about and turned into two separate living rooms. We are merely turning it back into one room – and retaining every bit of anything that is of interest or original.” 

Application submitted to convert Little Chef into church: An application has been submitted to convert a former Little Chef on the old A14 in Haughley, near Stowmarket, into a church by the Gilgal Pentecostal Church of Bury St Edmunds. Pastor Sunny John said: “We have been looking for a place for a long time, we have been in Bury St Edmunds for 11 years. Now we have found a place, we are asking for planning permission. It’s a quiet place and most people have got cars, we have families in Stowmarket, Hadleigh, Sudbury and Needham Market so it would be more convenient for them as we would be more in the middle of the county. We are looking forward to the move, we have found a place where we can put on more community programmes.” He said the church, which has 120 people in its congregation, was hopeful of moving to Haughley by the end of year if the plans were accepted.

Sheffield bar operator to open Picture House Social concept: Sheffield bar operator James O’Hara is convert a former snooker club in the basement of the Abbeydale Picture House on Sheffield’s Abbeydale Road into a bar called the Picture House Social. It will include a vintage-feel bar, games room with ping-pong and other activities, and an authentic Italian pizzeria. The former snooker area will be used as a community space for beer festivals, antiques markets and record fairs working with independent traders nearby. Work on transforming the 11,000 square foot basement has begun and it is expected to open sometime in the autumn. Site manager Joe Cribley said: “We don’t really want to look outside the city but it’s nice when you go to the northern quarter in Manchester and there isn’t a chain in sight. Abbeydale Road is a bit like that. We want to work with all the businesses around there because there seems to be a really good community spirit.” James O’Hara co-founded The Great Gatsby on Sheffield’s Division Street.

Richmond restaurant serves mystery menu: A Richmond restaurant is challenging Londoners to be more adventurous when they eat out by offering its guests a mystery menu, the London Evening Standard has reported. Customers at The Bingham, in Richmond, can chose to be kept in the dark about what they will be served and how many courses their meal will include. Head chef Mark Jarvis told the newspaper: “I want to change the way people order food. It’s different every night, different for every table. The only thing that stays the same is that we use the best seasonal ingredients we can find.” Customers choosing the menu will be asked to inform staff of any allergies or dietary requirements before the kitchen takes control, creating a tasting menu specifically for each table. The guests are usually told what the dish is when it is served, though they are sometimes challenged to guess. There is also the option to have the restaurant choose drinks to go with your food, from fine wines to shots. The mystery menu costs £35 for lunch or £50.70 for dinner. The accompanying drinks pairings are a further £30 for lunch and £50 for dinner.

Sharp’s produces freeze-distilled beer: Sharp’s Brewery has created a limited edition freeze-distilled beer. The single-batch brew Ice Ale by the guys behind Doom Bar is on sale at pubs across the south east until 5 September while stocks last. The 4.2% tipple is developed using refinement through freeze distillation and blending, creating a refreshing ruby red beer with berry fruit aroma and fresh hop and roast malt flavour. Sharp’s director of brewing Stuart Howe said: “Our limited edition Ice Ale is brewed using freeze distillation which produces a smooth and clean taste. With its crisp, dry finish Ice Ale is the perfect refresher for a hot summer’s day.” 

Geronimo Inns releases second series of Ask ray videos: Geronimo Inns, the award-winning 30-strong pub brand owned by Young’s, has released a second series of #AskRay videos. Following on from the success of the first series last summer, the series of digital videos sees Geronimo’s foodie chief, Ray Brown, cooking South American BBQ favourites, as chosen by their Twitter followers. The three short videos were shot on location in the beer garden of Geronimo’s West London pub The Eagle. The films provide viewers with detailed recipes on how to perfect classic South American dishes such as Peruvian Chicken, Mahi Mahi Vera Cruz and Corn Bread. Geronimo Inns reached out to their Twitter followers for video suggestions and filmed accordingly. #AskRay will be available to view on both Geronimo Inns’ website (geronimo-inns.co.uk) and YouTube channel (MyLocalsaGPub) and will be supported by a social media campaign across both Twitter and Facebook, featuring competitions and additional trivia not included in the films. The films represent a continued commitment from Geronimo Inns to digital video after the success of earlier projects including an interactive set of World Cup videos Pub Ammo, The Awfully Thorough Guide To Being British for the 2012 Olympics and a set of recruitment films with the comedian Marek Larwood – The Job Interview – with the latter two being featured on the homepage of iTunes UK, all of which are available on both the Geronimo Inns website and YouTube channel.

Tesco chief executive to walk away with £9.6m: Philip Clarke will walk away from Tesco with a fortune worth up to £9.6m and “enormous relief” after facing several months of criticism over his position at the top of the UK’s biggest supermarket. His removal comes as the supermarket admitted next year’s profits are set to plummet by as much as £600m according to analysts. Clarke added he had not been given an option of the timing of yesterday’s decision to fall on his sword and accepted the board’s call for his resignation. He will be replaced by Dave Lewis, Unilever’s UK and Ireland president. Chairman Sir Richard Broadbent, who would only say profits are expected to be “somewhat below expectations”, insisted he received no pressure from institutional investors to sack Clarke and that plans for a succession had been in place for some time. He said: “Having guided Tesco through a substantial re-positioning in challenging markets, Philip Clarke agreed with the board that this is the appropriate moment to hand over to a new leader with fresh perspectives and a new profile.” The City appeared to agree with his decision to show Mr Clarke the door, with shares closing up 1.28% at 288.65p despite profit warnings usually sending shares down. However, Mr Clarke told the BBC: “[The date] is not one of my choosing but it is a choice I would willingly make.” Clarke will leave officially in October with a £1.8m payoff and a personal shareholding worth £5.2m, and will be available in an advisory role until January. He will be paid 12 months in lieu of notice and receive his £1.2m salary until then. Investor group Manifest said he could get a total of £9.6m.

McDonald’s and Yum apologise to Chinese customers over meat factory scandal: McDonald’s and KFC parent Yum have apologised to customers after Chinese regulators shut a local meat supplier following a TV report that showed workers picking up meat from a factory floor, as well as mixing meat beyond its expiration date with fresh meat. The companies said they immediately stopped using the supplier, Shanghai Husi Food Co, a unit of Aurora, Illinois-based OSI Group, and had switched to alternatives. They added that the factory only served restaurants in the Shanghai area. “We will not tolerate any violations of government laws and regulations from our suppliers,” said Yum China, which required all of its KFC and Pizza Hut restaurants to seal up and stop using all meat materials supplied by the Husi factory. The division, Yum’s No. 1 business unit, had just seen its KFC restaurants bounce back from the double whammy of the food safety scare and a bird flu outbreak. “If proven, the practices outlined in the reports are completely unacceptable to McDonald’s anywhere in the world,” a China-based spokeswoman for McDonald’s told Reuters.

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