Chipotle subpoenaed over norovirus outbreak

Posted at 10:22 AM, Jan 06, 2016
and last updated 2016-01-06 12:23:50-05

Chipotle’s troubles are far from over.

The Mexican restaurant chain said Wednesday in a securities filing that it’s been hit with a Federal Grand Jury Subpoena after a norovirus outbreak in California.

In an 8K filing, Chipotle said that the subpoena was served in December 2015.

The subpoena is part of an investigation by the U.S. Food and Drug Administration’s Office of Criminal Investigations.

Chipotle is required to hand over several documents pertaining to its restaurant in Simi Valley, California where the norovirus outbreak occurred in August 2015.

Chipotle said in the filing that the incident was isolated and that it will cooperate fully with the federal investigation.

“It is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with the investigation pursuant to which the subpoena was issued,” Chipotle said in the filing.

In addition to the subpoena, the filing also shared Chipotle’s grim financial outlook for the final quarter of 2015 — an anticipated 14.6% drop in sales. Chipotle said it expects to spend between $14 million and $16 million in response to the recent outbreaks of E. coli, norovirus and Salmonella at its various locations.

The trouble began in August when 64 customers in Minnesota were infected with Salmonella and about 100 people were struck by norovirus in southern California.

These infections were followed by an E. coli outbreak in October and November that affected 53 people in nine states.

In December, Chipotle suffered from two more outbreaks. Roughly 140 students at Boston College were infected with norovirus and a second new incidence of E. coli broke out affecting five people in three states.

Chipotle’s shares fell about 2% on Wednesday to $442 a share. In August, Chipotle hit an all-time high at $758 a share, but have plummeted 42% in the last three months amid the outbreaks.