Aug 4 (Reuters) – Chipotle Mexican Grill said on Tuesday it had removed jalapenos from all its restaurants in Minnesota and other locations that received the product after identifying the peppers as a potential common ingredient in a salmonella outbreak under investigation by public health authorities.
Shares of Chipotle fell as much as 8.5% to $35.20, as investors weighed the impact of another food-safety investigation on the burrito chain that has faced more than a few foodborne disease outbreaks in the past.
Chipotle said it began tracing ingredients through its supply chain after learning of a potential outbreak and identified jalapenos from a common lot as a possible source, though health authorities are yet to determine the definitive cause.
“Out of an abundance of caution, we proactively removed the jalapenos from our restaurants and replaced them with product from different growers,” Chipotle said, but declined to identify the supplier.
The Minnesota Department of Health said it had identified 110 salmonella outbreak-related cases in the state. Among 84 people interviewed, 75 reported eating at Chipotle between June 14 and July 14, the agency said.
Health officials said the evidence gathered so far suggests the contaminated food item was also served at other Mexican-style restaurants, and the U.S. Food and Drug Administration is leading a traceback investigation to identify the source.
Chipotle has cooperated fully with the investigation, providing records and information about its food supplies and quickly removing suspected ingredients to help prevent further illnesses, Minnesota health officials said.
State officials said they were not concerned about the ongoing exposure at Chipotle, but cautioned the outbreak could continue if the contaminated ingredient was supplied to other restaurants.
“We do expect the case count to increase even if the illnesses occurred a couple of weeks ago, since it takes us a while to detect cases in surveillance,” Carlota Medus, senior epidemiologist supervisor in the Minnesota Department of Health Foodborne Diseases Unit, said.
Salmonella infections can cause diarrhea, fever and stomach cramps and can be particularly severe in young children, older adults and people with weakened immune systems.
The salmonella probe comes as restaurant operators face heightened scrutiny over food safety following the latest cyclosporiasis outbreak affecting Taco Bell, while also reviving concerns over Chipotle’s own history of foodborne illness outbreaks that hurt sales and prompted sweeping safety reforms.
The cyclosporiasis outbreak that has grown into the largest on record in the United States has caused its first known deaths, two people in Michigan, the state’s health department said on Monday.
Chipotle has faced a series of severe E. coli, salmonella and norovirus outbreaks across multiple U.S. states dating back to late 2015 that battered the company’s stock price.
Last week, Chipotle said the current quarter was likely to be its toughest of the year after a multistate cyclosporiasis outbreak dented consumer confidence in eating out in late July. The company said the outbreak-linked products are not used on its menu.
“Even if Chipotle has already reacted promptly and thus far we see no social media reactions to the news, we expect that the impact from the news could result in SSSG (same store sales growth) in 3Q decelerating below our expectation … if the situation does escalate,” Bernstein’s Danilo Gargiulo wrote in a note.
The company said on Tuesday the salmonella outbreak was affecting several food-service retailers and that it was cooperating with public health authorities investigating the source.
(Reporting by Anuja Bharat Mistry, Siddhi Mahatole and Aishwarya Venugopal in Bengaluru; Additional reporting by Waylon Cunningham in New York; Editing by Vijay Kishore, Diti Pujara and Shinjini Ganguli)
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