Chipotle hit with U.S. subpoena over California norovirus outbreak
By Sarah N. Lynch and Tom Polansek
WASHINGTON/CHICAGO (Reuters) - Chipotle Mexican Grill Inc (CMG.N: Quote), under scrutiny for months over outbreaks of foodborne illness across several U.S. states, said on Wednesday it was served with a subpoena in a federal criminal probe linked to norovirus cases in California last year.
Shares of the burrito chain fell nearly 5 percent to $426.67, the lowest in more than two years. That brought their decline to about 30 percent since Oct. 31, when its first E. coli outbreak was reported.
Chipotle in a regulatory filing also projected a 14.6 percent plunge in fourth-quarter same-store sales, compared with a previously estimated 8-11 percent drop. That would be the company's first quarterly same-store sales decline since it went public in January 2006. (1.usa.gov/1JtQlLV)
Chipotle said it received the subpoena in December as a part of a criminal investigation by the U.S. Department of Justice and the Food and Drug Administration. A federal grand jury will decide whether to press charges in the case.
Norovirus is the leading cause of food-related illnesses and outbreaks in the United States. It is highly contagious, often spreading when infected restaurant employees and food workers touch raw ingredients before serving. Food was the suspected source of the California outbreak, a state health department document from September showed.
The latest investigation adds another headache for Chipotle, whose sales have slumped since an E. coli outbreak sickened more than 50 people in nine states in October and November.
Since last fall, Chipotle has had to sanitize restaurants and throw out food while sending ingredients for testing at government labs, as company and public health officials attempt to pinpoint the source of the infections.
The week of Dec. 7, 120 Boston College students fell ill from a norovirus incident at a restaurant in Brighton, Massachusetts. More Chipotle-related E. coli cases were announced late December. Continued...