Shares of McDonald’s ( MCD ) fell 6% in premarket trading on Wednesday. Centers for Disease Control and Prevention He said the company’s quarter pounder burgers have been linked to E. coli outbreaks in some states, with most of the illnesses in Colorado and Nebraska.
“This is a fast-moving outbreak investigation,” the CDC wrote on its website. “Most of the sick people report eating McDonald’s quarter-pounder hamburgers and investigators are working quickly to confirm which food item was contaminated.”
Shares of the company fell as much as 10% in extended trading immediately after the news on Tuesday.
The CDC said McDonald’s has stopped using fresh onions and quarter-pound beef patties in some states while evidence of illness has been confirmed.
One person has died since the outbreak, the agency said, and 10 have been hospitalized in 10 states.
In an internal memo shared by McDonald’s on its website on Tuesday evening, Cesar Pina, chief supply chain officer for McDonald’s North America, said the company was taking “swift and decisive action” and noted that preliminary findings from the investigation “may indicate a subset of illnesses linked to the onions used in the Quarter Pounder.” by a supplier serving three distribution centers.”
“As a result, in accordance with our safety protocols, all local restaurants have been advised to remove this product from their supply and we have suspended the supply of sliced onions to the affected area,” the company said.
The menu item will be temporarily removed from restaurants in affected areas including Colorado, Kansas, Utah and Wyoming, as well as parts of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico and Oklahoma. All other menu items are available.
“While this incident is more visible than others we’ve seen in the industry, the expansion of the investigation or prolonged publicity has the potential to weigh on consumer traffic,” BTIG analyst Peter Saleh wrote in a note to clients on Wednesday. .
He also said that this incident will reduce the occurrence Chicken Big Mac And McRib Limited Time Offers (LTOs) Set up throughout the year.
“We hope that McDonald’s will reduce the advertisements supporting these LTOs in the future because the message will fall on deaf ears amid the wider coverage,” he explained. “The company may want to shift its messaging toward quality and away from value to reassure consumers about its food safety.”
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