Chipotle stock falls on link to salmonella outbreak in Minnesota

Chipotle Mexican Grill said Tuesday it temporarily pulled jalapenos from restaurants in Minnesota after learning that their supply may have been linked to a salmonella outbreak.

Shares of Chipotle closed nearly 10% lower.

“We have a robust ingredient traceability system and, upon learning of a potential Salmonella outbreak in the supply chain impacting several food service retailers, we proactively identified jalapeños as a potential common ingredient from a common lot, removed them from the restaurants where they had been distributed, and replaced them with product from different growers,” Chipotle spokesperson Laurie Schalow said in a statement to CNBC.

The stock reaction indicates investors see the news as a callback to Chipotle’s past as the poster child for food safety issues. The burrito chain was implicated in at least five separate foodborne illness outbreaks between 2015 and 2018. Chipotle added more training for employees, sick days and an enhanced food safety program to put those troubles in the past, and it is now seen as an industry leader on the issue.

Foodborne illness has also been top of mind for many consumers lately. The ongoing cyclospora outbreak has led to more than 6,700 cases confirmed by the Centers for Disease Control and Prevention. Michigan public health authorities on Monday also confirmed the first two deaths linked to the outbreak.

Though Chipotle does not serve any ingredients linked to the cyclospora outbreak, the company said concerns about the foodborne illness affected its sales in the second half of July.

Bloomberg first reported that Chipotle was pulling the jalapenos.