Thomson Reuters, 16 August 2017.
By Jeremy Coller, CIO of Coller Capital and founder of the FAIRR Initiative.
Three years ago a local reporter secretly captured footage of a Shanghai factory using expired and mishandled meat for supply to global fast food chains such as McDonald’s and KFC. The video went viral, launching an official investigation and inflicting massive damage on the share prices of both McDonalds and Yum! Brands (KFC’s parent company). In the three months following the scandal the two companies lost over $10.8 billion in market cap, and prison sentences were handed down to some of the employees involved.
Three years on, have lessons been learnt in the Asian food sector?
In a word, no.
A new report out this week from the FAIRR (Farm Animal Investment Risk & Return) Initiative warns global investors that food safety remains a ‘very high and immediate risk’ in Asia’s meat, dairy and seafood sector. It also brings antibiotic overuse and poor environmental management to the fore as sustainability risks likely to affect value and viability in the global food supply chain.
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