Safeway, Foster Farms Recall Infected Chicken Products - Analyst Blog


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California-based food and drug retailer Safeway Inc. ( SWY ) is voluntarily recalling a limited number of chicken products, in cooperation with CA-based poultry company, Foster Farms, which supplied the said products in the market.

The recalled products are believed to have been contaminated with Salmonella Heidelberg - a form of gram-negative bacteria that contaminates meat during slaughter and processing. This organism can cause serious and sometimes, even fatal infections in young children, frail or elderly people, and others with weakened immune systems.

This product recall has been linked to the outbreak of an antibiotic-resistant strain of Salmonella, which has affected more than 500 people in the past 16 months, and has resulted in federal action against Foster Farms. According to Centers for Disease Control (CDC), of the 621 people infected by 7 outbreak strains of Salmonella, 36% have been hospitalized.

Since March 2013, cases of infection have been reported across 29 states and Puerto Rico. However, investigators from the U.S. Department of Food and Agriculture (USDA) could directly link Foster Farms' boneless-skinless chicken breast to only one case of Salmonella Heidelberg.

In response to these findings, the USDA incriminated Foster Farms in the Salmonella outbreak, as reported by the Huffington Post. Consequently, Foster Farms had to issue a recall for 170 chicken products that came from its facilities in Fresno, CA, in March this year.

The recalled products, made with Foster Farms-supplied chicken, were marketed with "Use or Freeze By" dates ranging from March 17, 2014 through March 29. These items were sold during the above period in five states - Northern California, Hawaii, Northern Nevada, Oregon and Western Washington State, from self-service and full-service meat counters in stores.

Since these products are always sold fresh, they are no longer obtainable in stores. However, customers have been asked to check for such products in their freezers and either discard them or return them for a full refund.

The recalled products include drumsticks, thighs, chicken tenders, and livers. Most of the products were sold under the Foster Farms label, with some others were under the labels of FoodMaxx, Kroger, Safeway, Savemart, Valbest, and Sunland.

It is noteworthy to mention here that it is not unusual for raw poultry from any producer to have Salmonella bacteria. In fact, as per USDA rules, up to 7.5% of chicken products in a plant may test positive for the bacteria. At present, management at Foster Farms has undertaken a plan to check Salmonella rates in its poultry, which it believes, has been brought down to 5%.

Safeway currently holds a Zacks Rank #4 (Sell). Some better-ranked retail stocks that warrant a look are Tiffany & Co. ( TIF ), CVS Caremark Corporation ( CVS ), and Herbalife, Ltd ( HLF ). While Tiffany sports a Zacks Rank #1 (Strong Buy), CVS Caremark and Herbalife bear a Zacks Rank #2 (Buy).  

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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