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>> Politics has spoiled China's appetite for American fast food. At least that's the what the owner of KFC, Pizza Hut and Taco Bell is saying. Yum Brands reporting a drop in sales and it's established China restaurants in the third-quarter, Wednesday. In contrast to the 4% rise that analyst had expected for the overall China business.
The fast food giant says, it's all down to the South China Sea. An international court ruled in July that Beijing has no historic rights there, a move which angered the Chinese public. Yum says, protests and quote, negative sentiment have hit sales. And without the ruling, the company could have delivered a fifth straight quarter of same store sales growth.
News of the Q3 drop sent shares down in after hours trading. Yum is the biggest Western restaurant operator in China, but it's spinning off its business in the country at the end of October. Meaning, any future challenges it faces will have less impact on its US stock. Yum China will begin trading as a separate company on the New York Stock Exchange on November 1st.