Once a fast food darling beloved for offering cheap, healthful food, Chipotle Mexican Grill now faces possible criminal charges.
In its quarterly filings to the US Securities and Exchange Commission, the Colorado-based company that’s been plagued this year with E. coli and norovirus outbreaks at its stores in nearly a dozen states, revealed that it has been served with a federal grand jury subpoena related to a criminal investigation of its operations.
Federal investigators are targeting a company restaurant in Simi Valley, Calif., where dozens of customers and employees experienced gastrointestinal problems in August, some associated with the contagious stomach bug norovirus.
“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,” the company wrote in its Wednesday report to shareholders. Chipotle’s fourth quarter sales were down nearly 15 percent, it reported, and it expects them to continue declining.
There are few details available yet about the investigation, being conducted by the US Attorney's Office for the Central District of California and the US Food and Drug Administration's Office of Criminal Investigations. But one food marketing expert, John L. Stanton, professor at Saint Joseph's University in Philadelphia, hypothesizes that the government is seeking criminal charges because it believes that someone at the company knew it was serving unsafe food.
“There is an implication that someone was aware and didn't stop the process,” Prof. Stanton told The Christian Science Monitor in an interview.
“That would be grounds for a criminal case,” he said, and possibly a jail sentence if federal prosecutors can prove malfeasance.
Criminal cases of food safety are a new phenomenon, Stanton explains, though a growing one, as reports of consumer illnesses blamed on listeria-, salmonella- and E. coli-tainted foods are mounting.
In the past two years, the Justice Department has convicted or received guilty pleas in four criminal cases against food companies or their executives for sickening consumers, reports The Wall Street Journal.
These include a $11.2 million fine imposed on ConAgra Foods earlier this year for allegedly distributing Peter Pan peanut butter that it knew was contaminated with salmonella, blamed with sickening 700 people; a felony conviction of the former owner and three former employees of a peanut-processor Peanut Corp. of America, charged with causing a salmonella outbreak tied to nine deaths; and a brief prison sentence for two executives from Quality Egg, a large Iowa egg producer, for their alleged role in a salmonella outbreak.
The government’s increasing vigilance is a big departure from the 24 years preceding 2013, when it won the same number of convictions and guilty pleas in food safety cases as it did in just the last two years.
“What’s happening now is that a little more attention is focused on making these kinds of errors accountable to people, and not just accountable to companies and to money,” Stanton says.
Holding people accountable is a positive step, he explains, and will likely lead to safer food.
Chipotle has been scrambling to regain the trust of its loyal customers, replacing all food in its restaurants, testing its food in labs, and aggressively marketing the steps the company is taking to make its food safe.
The once-beloved company’s crisis will hopefully serve as an example to the rest of the food industry, Stanton says.
“If the FDA is successful at this, you’re going to see a heck of a lot less problems of this type,” he says.