Greencore shares fall 7% following listeria scare in US

Greencore shares fell by 7.2 per cent on Monday after it was forced to recall several product lines on foot of a listeria scare at its plant in Rhode Island.

The Irish convenience food giant said it was voluntarily recalling egg salad sandwiches, ham salad sandwiches and seafood stuffing supplied to several food businesses on the east coast late last month.

It is understood that only about 100 items were affected and the issue related to ingredients supplied to Greencore by an external supplier.

The businesses include Walgreen, American Food and Vending, Hannaford Brothers, Target and Turkey Hill, which have outlets in Massachusetts, Rhode Island, Connecticut, Maine, Vermont, New Hampshire and New York.

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While there have been no reports of any illnesses associated with the recalled sandwiches, Greencore shares traded down 7.2 per cent at £1.80 in London, where it holds its main listing.

Traces of listeria were discovered during a routine inspection of the company’s Rhode Island plant by US Food and Drug Administration (FDA) officials.

“No finished products have been found to have listeria present and no confirmed illnesses have been reported,” the FDA said in a statement, while noting that Greencore customers had been instructed to remove and destroy impacted product.

‘Fully operational’

In a statement, the company said: “This is a purely precautionary measure, as no finished products have been found to have listeria present and no confirmed illnesses have been reported. The site in question remains fully operational, with the impacted area having received a deep clean.

“Greencore operates to the very highest levels of food safety and hygiene, and has launched an internal investigation in order to establish how this isolated incident of contamination came about,” it added.

Listeria can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. It can also cause miscarriages and stillbirths in pregnant women.

However, healthy individuals typically suffer only short-term symptoms such as high fever, severe headache, nausea and abdominal pain.

Nervy

Investors remain nervy about the performance of Greencore’s US business and brokers said the listeria episode may have triggered a bigger-than-expected slide in the shares.

In August the loss of a big contract with US coffee giant Starbucks prompted a two-day sell-off of Greencore shares. The company had supplied the coffee behemoth with frozen sandwiches through its plant in Jacksonville, Florida.

This business had a turnover of close to $100 million (€84 million), of which some $65 million is believed to have been tied to the Starbucks contract. Greencore said it had decided to refocus its Florida plant on fresh products rather than the frozen goods, suggesting the impact on profitability would be minimal.