Maple Leaf's future seen at risk amid food recall

Tue Aug 26, 2008 6:57pm EDT
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By Roberta Rampton

WINNIPEG, Manitoba (Reuters) - Maple Leaf Foods Inc (MFI.TO: Quote) stock took another beating on Tuesday and some observers said the very survival of the company may be at risk as more products were pulled from store shelves amid a deadly food poisoning outbreak.

Shares of Maple Leaf, which is also facing a series of class action suits, skidded another 9 percent amid a huge recall of deli meats linked to a listeriosis outbreak that has been associated with 15 deaths.

Chief Executive Michael McCain has called the outbreak the biggest crisis in Maple Leaf's 100-year history. Some analysts said the future of the company is at stake.

"This is kind of a bet-the-company kind of issue," said Jim Etscorn, a product liability lawyer with U.S. firm Baker Hostetler LLP.

"This thing's not going to die down any time soon," he said.

Four ready-made sandwich brands were recalled on Tuesday on fears they may contain some of the meat products that Maple Leaf has already recalled.

McCain, whose family owns a 40 percent stake in the company, apologized publicly to consumers after officials confirmed meat from one of its 23 plants tested positive for the same strain of listeria bacteria that has made 29 people sick, including the 15 who have died.

Another 30 cases are under investigation, health officials said on Tuesday. Of the deaths, listeriosis was the underlying or contributing cause in six cases, and is under investigation in nine others.   Continued...

<p>Maple Leaf Foods President and CEO Michael McCain addresses shareholders at the company's annual general meeting in Toronto April 26, 2006. Canadian health officials said on Monday 12 people have died out of 26 confirmed cases of listeriosis, a food poisoning that genetic tests linked to prepared meats from a Toronto plant owned by Maple Leaf Foods Inc &lt;MFI.TO&gt;. REUTERS/J.P. Moczulski</p>