Chipotle Served In Criminal Investigation Following Norovirus Outbreak

This is connection with the criminal investigation launched against the norovirus cases in one of its restaurants found in Simi Valley, California, August past year. Two California residents filed suit for damages after they became sick after eating at that location in August of previous year.

A company spokesman declined to respond to the legal action.

“It’s never good news for a company when federal prosecutors open a grand jury investigation into its operations, but it’s far too early to tell how sustained that interest will be here and what, if any, criminal violations will come to light”. The incidents prompted Chipotle’s CEO to apologize in full-page advertisements last month.

All in all, more than 500 people have been affected by these illnesses obtained at Chipotle restaurants in the second half of 2015 alone, according to Food Safety News.

Chipotle Mexican Grill is blaming national media coverage of E. coli and norovirus outbreaks tied to its restaurants for its 30% sales plunge in December.

Embattled fast-food restaurant Chipotle is now facing a criminal investigation over a norovirus outbreak in California, the company said yesterday.

The investigation announced on Wednesday is an additional headache for the company which has seen sales slump after an E. coli outbreak sickened more than 50 people in nine states in October and November.

Chipotle in December received a federal grand jury subpoena following the outbreak that reportedly led to the illness of some 80 customers and about 20 employees. Since then, sales have declined rapidly, sinking 30% (down 14.6% in the fourth quarter of 2015), according to Chipotle, making this the first decline in sales since the company went public in 2006. Chipotle’s shares were down 3% in premarket trading after it disclosed the subpoena and its financial outlook in the documents. Chipotle said Wednesday that particular case had resulted in a weekly drop of 34 percent in same-store sales, a measure of revenue closely followed in the retail industry.

It’s already involved in a US government immigration investigation that started in 2010 and caused the company to fire hundreds of workers. There have only been a handful of criminal investigations into these kinds of food-safety problems, and they typically involve products shipped across state lines, he said.

The company, which also announced a $300 million share buyback, said it will fully cooperate with the probe.