July 14 (Reuters) – Yum Brands’ shares fell as much as 4.5% on Tuesday after the Washington Post reported federal and state health officials were investigating whether lettuce served at Taco Bell may have been associated with an outbreak of cyclosporiasis, an intestinal illness.
Cases of the disease, which causes diarrhea, nausea and other gastrointestinal symptoms, have risen steadily in recent months across the country. Thirty-four states have reported cases, according to the U.S. Centers for Disease Control and Prevention.
“Public health officials have not confirmed a link to Taco Bell or any specific ingredient, supplier, restaurant or retailer,” said Taco Bell, adding that it has voluntarily and temporarily removed limited ingredients at select restaurants as a precautionary measure.
The chain said it would continue to closely monitor the situation and follow the guidance of public health authorities.
In Brooklyn, several major grocery store and fast-food chains, including Taco Bell, had not posted signage or pulled products on Tuesday, a Reuters reporter observed.
Most people in stores and on the sidewalk had also not heard about the outbreak, though office worker Dee Stephens — standing outside the Taco Bell on Bushwick Avenue — said she planned to avoid lettuce for the foreseeable future.
“I can get my greens in other ways,” she said.
Foodborne illness outbreaks can weigh heavily on restaurant stocks. McDonald’s came under scrutiny during a cyclospora outbreak linked to salads in 2018, while Chipotle Mexican Grill faced a series of severe E. coli and norovirus outbreaks across multiple U.S. states, which battered the company’s sales and stock price.
“Perception matters as much as the facts in the early stages of a food safety investigation. Even an unconfirmed link to a foodborne illness can cause consumers to rethink where they eat,” said Zak Stambor, analyst at eMarketer.
“Even if the chain is ultimately cleared, the investigation could cast a shadow over the brand and weigh on sales in the near term,” he added.
Lab-confirmed cases linked to the recent outbreak of cyclosporiasis have risen to 1,645, the CDC said on Tuesday, up by more than 800 cases from its last update a week ago.
The current U.S. outbreak, which began on May 1, is centered in Michigan, while Ohio and New York have also reported high numbers of cases.
Infections across the country have resulted in 141 hospitalizations as of July 13, according to the health agency. No deaths have been reported.
The CDC said it is also aware of more than 5,100 additional cases that require further analysis and confirmation.
Cyclosporiasis can be contracted by consuming food — typically raw fruits and vegetables — or water contaminated with feces, according to the CDC.
(Reporting by Anuja Bharat Mistry, additional reporting by Sanskriti Shekhar in Bengaluru and Waylon Cunningham in New York; Editing by Jonathan Ananda)
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