The fast casual restaurant chain Chipotle Mexican Grill took a serious blow after it had to close nearly 50 outlets across the Pacific Northwest because of an E. coli outbreak. Chipotle stocks (CMG) were around $756 last summer; yesterday they closed at $624.
The company has stated that it is working closely with health authorities to find the cause of the outbreak and to stop its spread.
“After being notified by health department officials in the Seattle and Portland, areas that they were investigating approximately 20 cases of E. coli, including people who ate at six of our restaurants in those areas, we immediately closed all of our restaurants in the area out of an abundance of caution,” said Chipotle in a statement.
This is the third outbreak Chipotle has seen since August. The food contamination has resulted in store closures in Minnesota (due to salmonella) and in California (due to norovirus, a highly infections virus).
“Having three problems in a couple of months means that Chipotle is not paying attention to food safety like it should,” said Bill Marler, a Seattle food-safety lawyer.
Chipotle has over 1700 outlets across the United States and offers a menu of burritos, tacos, and taco salads. The company is oft eager to promote its high-quality fresh foods, although there is debate about just how healthy their food actually is. Fresh, GMO-free food may be good for nutrition but it increases the risk of food-borne pathogens.
“We are looking at everything, but our epidemiology investigation is guiding us toward produce,” said Jonathan Modie, a spokesman for the Oregon Public Health Division. “Chipotle has meat products, but based on things we heard from people who got sick … it seems like the most common denominator is some kind of vegetable course.”
An E. coli infection is caused by eating food that has come in contact with fecal matter.
There were three reported cases of E. coli in Oregon and 19 in Washington since October. Victims ranged in age from 11 to 64. There have been no deaths but several hospitalizations. More cases are expected as people with stomach bugs make the connection between their illness and eating at Chipotle.
”Health officials want people who have eaten at a Chipotle between October 14 and 23, and become ill with vomiting and bloody diarrhea, to see their health care provider and mention this outbreak,” said the Oregon Health Authority.
Food contamination outbreaks do not happen often and usually result in a change up of suppliers plus various legal actions. Despite this, sales recover so long as the food poisoning is not lethal.
“Short term they (Chipotle) will take a hit but it will blow over quickly. They have a lot of customer goodwill,” said Bob Goldin, executive vice president Technomic, consulting firm.
“We offer our deepest sympathies to those that have been affected by this situation,” said Chipotle.