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China's graft crackdown hits France's wine, spirits exports
by Staff Writers
Paris (AFP) Sept 09, 2014


McDonald's sales hit by China meat scandal
New York (AFP) Sept 09, 2014 - Sales at McDonald's restaurants dropped in August, hurt by a food-safety scandal in China and heavy competition in the US, the company said Tuesday.

The US fast-food giant said global comparable sales fell 3.7 percent in August, bigger than the 2.5 percent decline in July.

"During August, McDonald's global business faced several headwinds that impacted sales performance," said chief executive Don Thompson.

Sales sank 14.5 percent in the Asia/Pacific, Middle East and Africa region, which accounts for about one-fourth of McDonald's revenues.

McDonald's did not release revenue figures for August. In the second quarter, the fast-food company reported global revenues of $7.2 billion.

In July, Chinese officials shut food-supplier Shanghai Husi Food Co. following a television report alleging the plant mixed out-of-date meat with fresh product that was then supplied to McDonald's.

The restaurant chain also curtailed Japanese sales of products made with chicken from China in the wake of the debacle.

McDonald's said it expects the China food safety problems will result in a drop in earnings of 15-20 cents per share in the third quarter compared to last year, when it notched $1.52 per share.

US comparable sales fell 2.8 percent in August due largely to "sluggish industry growth in a highly competitive marketplace," the company said.

European comparable sales declined 0.7 percent, with a strong performance in Britain offset by weakness in Russia.

In 2013, US sales accounted for about 30 percent of McDonald's global revenues, while European sales represented about 40 percent.

Dow member McDonald's fell 1.0 percent to $91.58 in mid-morning trade.

China's anti-corruption and frugality drive has hit France's wine and spirits industry hard as exports dropped more than 7 percent in the first semester, a leading trade body warned Tuesday.

The Middle Kingdom may have shot up to fifth place in France's list of best foreign clients, but its purchases -- which are usually in the high-end range -- suddenly melted away in the first six months of 2014, according to the Federation of French Wine and Spirits Exporters (FEVS).

These fell by nine percent in volume and by nearly a third in value, the trade body said.

"The anti-extravagance drive decided at the beginning of 2013 has clearly impacted the highest value-added products such as great cognacs and Bordeaux wines," Pierre Genest, deputy head of the federation, told AFP.

"The Chinese decision penalises us even more because it was sudden and we were not able to anticipate it, and because it targets the best-valued products."

Chinese President Xi Jinping has launched a graft crackdown since taking office last year with a series of high-profile takedowns of party officials that have sent shockwaves through an elite who once did little to hide their prosperity.

A related austerity drive -- ordering an end to excessive gift-giving and banquets within the state sector -- has also meant officials are wary of popping too many champagne corks or opening high-end bottles of wine.

According to FEVS, French wine and spirits exports in the first semester were worth 4.8 billion euros ($6.2 billion), a 7.3 percent drop from the same period in 2013.

Spirits alone were worth 1.5 billion euros, and exports of cognac, which count for two thirds of the turnover in this category, fell 12 percent in value.

Wine exports, meanwhile, also dropped. While the sale of champagne abroad continued to rise, Bordeaux wines plummeted by 28 percent in value.

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