CDC Investigating More E.COLI Affected Patients Related to Chipotle, Shares Plunge

The company said that five people fell ill after eating at two Chipotle locations.

Chipotle Mexican Grill Inc (NYSE:CMG)(TREND ANALYSIS) would presumably like nothing better than to put its recent spate of health scares behind it, and over the last week or so the company has looked ready to start doing that.

Earlier this month, Boston’s Public Health Commission also received multiple reports of gastrointestinal illness from 136 people who consumed food at the city’s Chipotle restaurant, according to a statement.

As of December 18, 2015, the CDC said 53 people infected with the outbreak strain of STEC O26 have been reported from nine states. This outbreak has led to the hospitalization of 20 people, but no one has died.

Following the outbreak, Chipotle Mexican Grill Inc. has said it is implementing new standards to ensure food safety.

In its annual report, Chipotle has noted it may be at a higher risk for outbreaks of food-borne illnesses because of its “fresh produce and meats rather than frozen, and our reliance on employees cooking with traditional methods rather than automation”.

Dr. William Schaffner, a professor of infectious diseases at Vanderbilt University’s School of Medicine, says this number of outbreaks tied to a single chain is somewhat unprecedented.

Particularly troubling is the fact that the E. coli strain involved in the more recent outbreak appeared to have a different DNA fingerprint than the one to blame for a larger E. coli outbreak that began in the Pacific Northwest.

With sick customers around the country, Chipotle’s bottom line has been damaged, with stock down 4 percent on Tuesday.

Chipotle officials have taken action to enhance the company’s food safety program and hired Seattle-based IEH Laboratories to help improve the company’s safety practices, according to a Chipotle press release.

“At this point, even rational and informed consumers could potentially be given reason to pause when choosing Chipotle over the plethora of fast casual competition in the marketplace”, Ivankoe told clients, cutting his price target on the stock to US$555 from US$630.

It still has yet to be determined if the five new cases are related to the original outbreak.

The CDC is investigating five new cases of E-coli linked to Chipotle restaurants.

Oches said “plenty” of restaurants have recovered from food safety crises.