Rat in Broth Wipes $190 Million Off Restaurant Chain’s Value

THE NEW YORK TIMES:

At hotpot restaurants in China, most of the ingredients are relatively inexpensive. Customers dip pieces of raw meat and vegetables into a big vat of simmering broth until everything cooks and bubbles to the surface.

For one Chinese restaurant chain, however, an item found by a customer at one of its outlets has proved to be particularly costly: a rat.

A video of a small, dead rat — boiled, gelatinous and with its stunned arms outstretched — fished out of a vat of bubbling broth has shocked China, and sent shares of a popular restaurant chain plummeting.

The rat was found last week at a branch of the chain, Xiabu Xiabu, in Weifang, a city in the eastern province of Shandong. A local newspaper reported the incident on Friday and video footage of the customer picking the rat out with chopsticks circulated on Chinese social media all weekend.

By the close of trading on Tuesday, shares in the chain’s parent company, Xiabuxiabu Catering Management, had fallen almost 12.5 percent, at one point dropping to their lowest in nearly a year. In all, the discovery of the rat had knocked about $190 million off the market value of the business, which is publicly traded in Hong Kong. The company’s shares recovered somewhat on Wednesday, gaining around 3 percent.

More at the New York Times

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