82
Maple Leaf Foods shuttered its Toronto factory indefinitely Wednesday as investigators search for the cause of a deadly listeria outbreak that has killed six people.
"We will not restart the plant until this investigation is complete, and I've signed off on it personally," chief executive officer Michael McCain said yesterday.
The company pulled 220 brands of deli meat off store shelves in a recall estimated to cost $20-million after a strain of listeria found in its Toronto factory matched the strain implicated in six deaths and dozens of illnesses across the country.
Maple Leaf shares had fallen 27 per cent since news of the outbreak hit, but closed higher Wednesday for the first time in eight sessions, up 3.75 per cent to $8.29 on heavier-than-usual volume.
Maple Leaf Foods
Related Articles
TD Newcrest analyst said in a note to clients that the shares should find support at this level, as investors realize the value of the company's other divisions.
"We still believe there is good value in [Maple Leaf]," he said. "In fact, the bakery and rendering businesses are estimated to be worth at least $7.90 a share on their own, which should help support the share price around current levels and ultimately help the shares recover faster once the crisis has subsided."
Mr. McCain told a press conference yesterday that while the company may be able to "narrow the scope into a range of possibilities" of how the outbreak occurred, it's unlikely to pinpoint one root cause. The effort is akin to "finding a needle in a haystack," he said.
Testing the product as it leaves the factory is also not in the company's plans, he said, adding that it's "statistically impossible" to check everything that leaves its manufacturing lines.
"The best scientific evidence is that product testing does not add any value to your ability to assess the risk of listeria being in the product," he said. "I'm not a scientist, but you can sit down with a statistician to understand that. If you would go out and take 10 samples from the haystack, it's likely you won't find the needle."
The answer to better safety, he said, is to prevent the needle from being placed in the haystack in the first place.
"No matter how many times you walk out and pull out a sample," he said, "statistically, the vast majority of times you'll get a negative result even though it's positive."
Mr. McCain repeatedly said the Canadian food inspection system did not fail consumers.
"This week, it's our best efforts that failed, not the regulators or the Canadian food safety system," said Mr. McCain. "I emphasize: this is our accountability and it's ours to fix, which we are taking on fully. We have and we continue to improve on our action plans."
