Hygiene Issues Beset China's Popular Heytea Tea Chain
Xu Wei
DATE:  Jun 12 2019
/ SOURCE:  yicai
Hygiene Issues Beset China's Popular Heytea Tea Chain Hygiene Issues Beset China's Popular Heytea Tea Chain

(Yicai Global) June 11 -- Heytea, a tea drinks brand popular with younger Chinese, has been reported for hygiene problems four times in the past six months, raising concerns about its handling of food safety, the Changjiang Times reported.

A pregnant woman in Suzhou, Jiangsu province, found a fly in her drink at Heytea's Yuanrong outlet on May 29. After talks failed, she raised the issue with the media and regulators. The shop was forced to close on May 31 because of an insect infestation. The Shenzhen-based company behind the chain, Meixixi Catering Management, apologized to consumers in a circular issued after the store shut and claimed that it would not reopen it until the issue was resolved.

This is not the first time that Heytea has faced questions about hygiene. Netizens revealed that some foreign bodies were found in the firm's bubble tea last December. On Jan. 4, yet others blasted a Heytea shop in Xi'an, Shaanxi province, for being dirty and unhygienic. Market regulators in Xiamen, Fujian province, also recently found that a local outlet was unqualified due to hygiene matters and on May 9 ordered it to immediately rectify the situation.

The frequency of these issues is a direct result of the firm's random, high-speed expansion, the Changjiang Times' report said, quoting unidentified sources. Heytea had a total of 163 outlets, mainly in first- and new first-tier cities at the end of 2018, it said earlier this year. The brand accelerated it new store openings this year and its total number is expected to double to at least 300.

The report also cited the same sources as saying that Heytea has completed its latest round of financing, valuing the business at more than CNY8 billion (USD1.2 billion), with investors including Tencent Holdings and Sequoia Capital. The chain has not confirmed the investment. In 2016, Heytea secured CNY100 million (USD14.5 million) from He Boquan, an angel investor from IDG Capital, according to its website.

Heytea also has not revealed when it plans to go public. Hygiene issues will impact its valuation and the firm should improve its product competitiveness and ensure quality if it wants to successfully float and retain a loyal customer base, the news report quoted another industry insider as saying.

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Keywords:   Suzhou,HEYTEA