Taco Bell briefly closes 9 stores in food scare

Taco Bell CHICAGO (Reuters) - Taco Bell on Tuesday raised to nine the number of fast-food restaurants it had closed in New York and New Jersey after a suspected outbreak of the foodborne E. coli bacteria that may have sickened more than 50 people in three states.

But the division of Yum Brands Inc. said no new cases had been reported since November 29 and it had planned to reopen the eight New York locations later on Tuesday.

The New Jersey Department of Health and Senior Services said it was investigating 40 cases of E. coli infection in four counties. So far, 23 people who were sickened between November 20 and possibly November 30 ate at a Taco Bell restaurant, the department said in a statement on its Web site.

The source of the outbreak had not been determined.

Claire Pospisil, a spokeswoman for the New York State Department of Health, said 14 people in Long Island had been infected with E. coli in the last two weeks. The source of those infections has not yet been identified, but health officials were looking at Taco Bell restaurants, she said.

Pospisil said the department was investigating additional reports from other New York counties and the number of infected people in the state was expected to increase by Wednesday.

The Pennsylvania Department of Health also said on Tuesday that it was investigating four cases of E. coli. Three of the cases involved an individual eating at a Taco Bell restaurant in Montgomery County, but no source had been identified.

Shares of Yum, which announced at a previously scheduled investor meeting on Tuesday it would double its quarterly cash dividend, initially traded down on the E. coli news, but closed up nearly 3 percent to $63.26 on the New York Stock Exchange.

SHARE HIT 'TEMPORARY PHENOMENON'

Analysts were monitoring the E. coli scare, which made the front page of the New York Times and received a lot of media play on Tuesday. Yet they noted that such scares tend to have only a short-term effect on the stock of the company involved.

"It's more of a temporary phenomenon unless it's widespread," said Arun Daniel, senior retail and consumer analyst for ING Investment Management. "So far (the problem) appears to be somewhat contained to a certain number of Taco Bells in New York and New Jersey."

Taco Bell had initially said on Monday that one restaurant in Middlesex County, New Jersey, and four in Suffolk County, New York, were closed as the company sanitized the facilities and replaced the food. A company spokesman said on Tuesday that the chain also closed four units in Nassau County, New York.

All the restaurants were served by the same distributor, said Taco Bell spokesman Rob Poetsch, who declined to name the company, citing proprietary reasons.

Escherichia coli is a usually harmless bacteria normally resident in the guts of animals, including humans. A new and pathogenic strain called E. coli O157:H7 was identified in 1982 and now causes an estimated 73,000 cases of infection and 60 deaths in the United States each year.

Most illness is associated with undercooked, contaminated ground beef. People generally become ill from the strain two to eight days after being exposed to the bacteria and infection often causes severe bloody diarrhea and abdominal cramps, according to the Centers for Disease Control and Prevention.

But in some people, especially young children and the elderly, the infection can cause kidney failure.

Taco Bell said it worked with health officials to have the affected restaurants inspected and reopened. Aside from the New York locations, the company said it expected to reopen the New Jersey restaurant later on Tuesday.

The Taco Bell situation was not the only food contamination scare on Tuesday.

SunOpta Inc. said California unit Cleugh's Frozen Foods Inc. would recall frozen strawberries sold exclusively to fresh juice and smoothie chain Jamba Juice because of a concern that the fruit may have been contaminated with Listeria monocytogenes.

Listeriosis is a fatal infection that can be contracted by young children, the frail or elderly, and others with weakened immune systems.

To date, no suspected illnesses have been reported, SunOpta said. Jamba shares fell 3.5 percent to $10.86 on Nasdaq.

(With reporting by Chelsea Emery in New York, Nichola Groom and Alexandria Sage in Los Angeles, Brad Dorfman in Chicago)

source - Reuters 

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