Chipotle Drops After E. Coli Probe Reaches California, N.Y.

Chipotle's E. Coli Cases Expand to Six States

An E. coli outbreak linked to Chipotle Mexican Grill Inc. has spread to six states, including California and New York, underscoring that the food-poisoning crisis isn’t over for the restaurant operator.

QuickTake Food Safety

The evidence suggests that an ingredient or “common meal item” served by Chipotle in several states was the source of the outbreak, the Centers for Disease Control and Prevention said in a statement on Friday. A total of 45 people were infected, including two in California, two in Minnesota, one in New York and one in Ohio, the CDC said. Of those people, 43 said they had eaten at a Chipotle.

The cause of the outbreak hasn’t been determined, but it “probably wasn’t meat,” Matt Wise, a CDC epidemiologist who is leading the investigation, said in an interview. He noted that a “couple of vegetarians” are among those sickened.

Chipotle, which operates about 1,900 units, appeared to have limited the damage from the outbreak when it announced last week that it was reopening 43 restaurants that had been closed for cleaning in Washington and Oregon. But now that the E. coli probe has expanded, it “has the potential to become a longer-term problem than the company would like,” said Asit Sharma, an analyst at the Motley Fool.

“The fact that these outbreaks don’t seem to be confined to a geographical region is harmful to the brand,” he said. “Chipotle’s brand-perception problem has just gone coast to coast.”

Shares Plummet

The company’s shares tumbled 12 percent to close at $536.19 in New York, marking the worst drop in more than three years. The stock was already down 11 percent this year before Friday, hurt by concerns about slowing growth.

The E. coli probe had previously focused on Oregon and Washington, where dozens of people got sick after eating at Chipotle restaurants. The Denver-based company shuttered locations there for more than a week as authorities investigated the E. coli outbreak. It also hired safety consultants, sanitized the restaurants and threw out unused food. The restaurants reopened about two weeks ago.

On Nov. 17, the CDC said one person in Minnesota also got sick from an E. coli strain that had the same “DNA fingerprint” as the cases in Oregon and Washington. But that person didn’t eat at Chipotle in the week before getting ill, the agency said.

‘Aggressive Steps’

“The source of the problem appears to have been contained during a period in late October,” the company said Friday in a statement. “In response to this incident, Chipotle has taken aggressive steps to make sure its restaurants are as safe as possible. There have been no reported new cases in Washington or Oregon since Chipotle put its remediation plan into effect.”

The E. coli scare follows a salmonella outbreak in Minnesota in September, when Chipotle restaurants were linked to dozens of infections. In that case, authorities identified tainted tomatoes as the source. One Chipotle location in California, meanwhile, saw about 80 customers sickened by an outbreak of norovirus over the summer.

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