In response to an E. coli outbreak associated with fresh onions, leading U.S. fast-food chains including McDonald's Corp (NYSE:MCD), Restaurant Brands International (NYSE:QSR), and Yum Brands Inc. (NYSE:YUM) have decided to remove the vegetable from their menus. The outbreak has reportedly caused 49 illnesses and one fatality.
What Happened: As reported by Reuters, the parent company of Burger King, Restaurant Brands International, and Yum Brands have also decided to eliminate fresh onions from their offerings. A spokesperson confirmed that about 5% of Burger King outlets have already implemented this change.
"We've been told by corporate to not use any onions going forward for the foreseeable future," said Maria Gonzales, a manager at a Longmont, Colorado Burger KIng, according to the report.
McDonald's identified Taylor Farms as the source of the contaminated onions, which have now been recalled. Yellow onions from a Colorado facility have been recalled, according to a memo by US Foods (NYSE:USFD), a major U.S. food service supplier.
The U.S. Food and Drug Administration announced that Taylor Farms, the supplier for the impacted McDonald's locations, has started a recall. The health regulator is working with both federal and state authorities and the companies to establish if onions led to the outbreak.
Why It Matters: This outbreak follows a recent report of E. coli cases linked to McDonald's hamburgers, which led to a drop in the company's shares. The U.S. Centers for Disease Control announced that 49 cases of E. coli were detected across 10 states, with the majority of sick people reporting eating Quarter Pounder hamburgers from McDonald's.
The FDA has launched an investigation into Taylor Farms, the supplier of McDonald's, after multiple people fell ill with E. coli linked to the restaurant chain's Quarter Pounder. The FDA currently believes slivered onions served on McDonald's hamburgers are the most likely source of contamination.
Despite the outbreak, analysts had previously stated that the impact on McDonald's stock would be minimal. However, David Tarantino, an analyst at Baird Equity Research, downgraded McDonald's shares to "neutral" late on Wednesday due to concerns over consumer sentiment.
Price Action: On Thursday, McDonald's stock traded 1% higher at $301.58 in the regular session and was largely flat in the after-hours trading, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal
