McDonald's (MCD.US) stock drops 10% after E. coli outbreak, rival stocks rise
1min read The U.S. Centers for Disease Control and Prevention (CDC) reported an outbreak of E. coli linked to McDonald's (MCD.US) Quarter Pounder burgers, which has led to 49 illnesses, 10 hospitalizations, and one death. The affected states include Colorado, Nebraska, and nine others, with most cases concentrated in Colorado and Nebraska. The CDC noted that most patients reported consuming McDonald's Quarter Pounder burgers prior to becoming ill, with one patient developing hemolytic uremic syndrome, a condition that can lead to kidney failure. The news caused McDonald's shares to drop as much as 10% in after-hours trading.
McDonald's quickly responded to the outbreak, stating that it was taking "swift and decisive action" and noting that preliminary investigation results suggested that the illnesses may be linked to sliced onions provided by a single supplier, which are used in Quarter Pounder burgers. The company instructed all local restaurants to remove sliced onions from their supply and suspend distribution of the ingredient in affected areas. In addition, McDonald's temporarily halted sales of Quarter Pounder burgers in several western states, including Colorado, Kansas, Utah, and Wyoming, and in parts of other states, and is working with suppliers to replenish ingredients.
The food safety incident affected McDonald's stock, which fell nearly 10% after the news was released, and is now down 5%. Meanwhile, shares of competitors such as Restaurant Brands International (QSR.US), which owns Burger King, and Wendy's (WEN.US) and Shake Shack (SHAK.US) rose.
Joe Erlinger, president of McDonald's USA, emphasized in a video that most states and menu items were not affected by the outbreak and noted that the company's other beef products, including cheeseburgers, burgers, Big Macs, Double Quarter Pounders, and Double Cheeseburgers, were unaffected because those sandwiches use different types of onions.
As a globally recognized fast-food chain, McDonald's has always prioritized food safety. The company has taken a series of measures to ensure food safety, including training employees on food safety, establishing a digital food safety system (DFS), and collaborating with suppliers to provide food safety training.
Despite these efforts, the incident serves as a reminder of the importance of food safety in the restaurant industry and the need for swift and transparent measures when facing potential food safety issues. Joe Erlinger, president of McDonald's USA, emphasized the company's commitment to food safety in the video and expressed the hope of restoring the full menu in the affected states as soon as possible.
