McDonald's Stock Falls Further as E. Coli Cases Rise. What to Know About the Breakout
The confirmed number of people sickened by a strain of the E. coli bacteria tied to $McDonald's(MCD)$ 's Quarter Pounders has grown to 75 people, including an older adult in Colorado who has died. At least two people have filed suit against the burger chain over the outbreak.
The illnesses began in late September and were first announced Tuesday by the Centers for Disease Control and Prevention. The exact source of the outbreak hasn't been determined and an investigation by the Food and Drug Administration is ongoing.
Taylor Farms, the California-based supplier of the slivered onions used on the burgers, confirmed Friday that it has initiated a voluntary recall of yellow onions from its Colorado facility that were sent to customers.
Here is the latest news on the situation.
States and People Affected by E. Coli Outbreak
As of Oct. 24, 75 people were confirmed to have been sickened in 13 states, up from the initial 49 people in 10 states reported earlier in the week. Twenty-two people have been hospitalized and one has died. Two other people have developed hemolytic uremic syndrome, which can cause kidney failure.
Colorado has the most cases, with 26, followed by 13 in Montana and 11 in Nebraska. The other states with confirmed cases are Iowa, Kansas, Michigan, Missouri, New Mexico, Oregon, Utah, Washington, Wisconsin, and Wyoming.
Quarter-Pounder Removed From Some Menus
The burger chain said earlier this week that it was "temporarily removing" the Quarter Pounder from restaurants in Colorado, Kansas, Utah, and Wyoming, as well as portions of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico, and Oklahoma.
On Friday, McDonald's added that it stopped selling slivered onions from Taylor Farms' facility in Colorado Springs on Oct. 22. Previously, onions from that facility "were distributed to approximately 900 McDonald's restaurants, in Colorado, Kansas, Wyoming, and portions of other states in the area."
It added that none of its other menu items were affected.
"At McDonald's, food safety is something we will never compromise on," the company added.
Taylor Farms Voluntary Onion Recall
Taylor Farms, which supplied onions to the affected McDonald's locations, initiated a voluntary recall, the Food and Drug Administration said late Thursday. Other food-service customers also received yellow onions from the supplier. "Customers who received recalled onions have been directly notified of the recall," an FDA spokesperson said.
Taylor Farms says it is working with the CDC and FDA. It confirmed that it recalled yellow onions from its Colorado facility that were sent to its customers. "All Taylor Farms products in the market today are safe to consume," a spokesperson said.
The privately held company based in Salinas, Calif., has 20,000 employees and sells a variety of salad kits, snack trays, and vegetable-based meal kits, according to its website. It partners with "hundreds of family farmers across the country."
Burger King, Taco Bell, and Others Take Action
Other fast-food chains have begun pulling onions from their supply chains as well. Burger King has asked restaurants that received whole onions from Taylor Farms' Colorado facility to "dispose of them immediately," a spokesperson said.
$Yum(YUM)$ Brands, which owns Taco Bell, Pizza Hut, and KFC, has removed fresh onions from select restaurants "out of an abundance of caution," it said.
What to Know About E. Coli Infections
Escherichia coli, or E. coli, are bacteria that normally live in the intestines of people and animals. Some strains can cause gastrointestinal distress or even be life-threatening.
"Human carriers can spread infections when food handlers do not use proper hand washing hygiene after using the restroom," according to the FDA website.
Symptoms of infection include stomach cramps, diarrhea, fever, nausea, and vomiting. They typically clear up within a week. If you experience these symptoms and they don't resolve on their own, consult your physician.
Lawsuits Filed Against McDonald's
Two people have so far filed suit against McDonald's for "failing to take reasonable measures to prevent the transmission of E. coli," among other charges. Filed Wednesday in Cook County, Ill., according to documents provided to Barron's by the plaintiffs' attorney, the suits seek more than $50,000 each for damages and court costs. McDonald's didn't comment on the suits.
McDonald's Stock Price Reaction
Shares of McDonald's fell 3% Friday to $293. They have fallen 7% since the news broke earlier this week. The fast-food chain's stock price is down about 1% versus the $S&P 500(.SPX)$ 's 22% rise this year.
After closing at a 2024 low of $246.82 in early July, McDonald's stock had been on the rise over the past few months following the release of value meals priced at $5 or $6 each. It closed at its highest level on record on Friday of $316.56, a few days before the E. coli outbreak came to light.
Shares of Burger King's parent company, Restaurant Brands, were down 2.3% Friday to $73, while Yum! stock was stable at $133.
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