Signs of recovery as Beijing’s Xinfadi seafood market reopens, Yum sticks with China expansion plans

Published on
August 19, 2020

Beijing authorities have announced the phased reopening of a market connected with a highly publicized incident falsely linking imported salmon to the coronavirus.

The Xinfadi market made world headlines when an outbreak of COVID-19 was linked to a cutting board used for imported salmon.  A few days after the scare, China’s food inspection authority announced that after inspecting the samples from the market, it didn’t have any evidence that imported salmon can carry coronavirus. 

Almost 60 percent of the merchandising space market opened over the weekend to wholesalers only, Zhou Xin Chun, the Communist Party boss for the Fengtai district – where Xinfadi is located – told Beijing news outlets. Zhou said the market will be disinfected daily and closed one day of every week, with a phase two reopening set for September.

The market has been “transformed,” according to Zhou, with segregated areas for cooked and raw food as well as specific “dry” and “wet” areas where frozen or fresh and live seafood can be sold separately.

The Xinfadi reopening comes as authorities in Shenzhen have announced that frozen chicken from Brazil has been impounded after packaging in which the chicken was imported tested positive for coronavirus. Yet in contrast to the alarms raised by high-ranking Communist Party officials after the Xinfadi outbreak, Chinese reporting on the latest reporting of coronavirus and chicken has been low-key, with authorities also appearing to tighten control on social media content linking COVID-19 and imported meat and seafood.

China has experienced significant economic fallout from the coronavirus, which first came to public notice after an outbreak in a seafood market in Wuhan, China, in late 2019. The change in tone from China’s government appears to be an effort to secure more abundant food supplies after July saw a surge in average food prices – which rose 13.2 percent year on year, driven largely by a sharp rise in pork prices.

Now, a new COVID-19 detection in Yantai tied to packaging on imported seafood, which came through Dalian port, is threatening to cause further damage. Authorities in Yantai, a port city and major seafood processing hub, claim packaging on seafood imported in a single container (shared between three companies in the city) tested positive for COVID-19 last week – though there was no suggestion that the virus was passed on to anyone. The firms implicated in the issue were based in the Yantai Economic and Science Development Zone, a local industrial facility.

Authorities in Dalian are seeking to cushion the potential economic damage to local seafood processors by subsidizing the cost of coronavirus prevention and detection measures. Firms can claim half the cost of testing and prevention measures, up to a limit of CNY 30,000 (USD 4,200, EUR 3,600) per company. Companies are also getting reduced electricity prices, according to a government circular in the Jin Pu New District of the city, which is home to numerous seafood processing companies.

The district government is also subsidizing half the cost of local seafood companies’ spending on advertising through November, up to a limit of CNY 50,000 (USD 7,000, EUR 6,000) per firm. And a package of low-interest loans has been offered to the firms by the local state-owned banking sector.

In more positive news for seafood and meat suppliers, the restaurant chain Yum Holdings (which operates KFC, Pizza Hut, and Taco Bell in China) has said it will stick with its expansion plans for 2020 and will open 800 new restaurants in China this year. The firm opened 169 new outlets in the second quarter of this year, bringing to 10,000 its store count across mainland China. 

Yum, which serves cod in its regular KFC stores, has also added healthy menu items – including salmon salads – to an upmarket “healthy” KFC stores aimed at young urbanites. The firm has reported that sales in the second quarter of 2020 were 96 percent of those recorded in the second quarter of 2019 (albeit with a larger number of stores this year), with sales via home delivery up 36 percent year-on-year in the quarter.

Meanwhile, Dutch supermarket chain Spar has added premium seafood and a restaurant to its outlet in Dongguan, in prosperous Guangdong. Local favorites like farmed yellow croaker and Hunan crab are on the menu at the Xing He Cheng mall outlet in Donguan, one of China’s wealthiest cities. The 11,000-square-meter store is one of 400 Spar outlets in China, where the firm has struggled to raise the kind of premium sales which drive its revenues in European markets.

Spar outlets in Ireland average annual earnings of EUR 10,629 (USD 12,648) per meter squared, which compares an average of EUR 1,685 (USD 2,005) per meter squared for the company’s stores in China, according to data provided by Spar. Spar has opened six outlets in China since March, all owned by local partners.

Photo courtesy of Chintung Lee/Shutterstock

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