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Chipotle Food Poisoning Incident Reported In New York, Stock Plummets After Tweet From Eric Van Lustbader

By John Houck
Published on: 09:18 PST, Jul 7, 2016

Chipotle Mexican Grill cannot seem to catch a break. Thursday morning, shares of the company plummeted nearly 4 percent after author Eric Van Lustbader tweeted about a possible case of food poisoning at one of the chain’s Manhattan restaurants.

According to Van Lustbader’s tweet, his editor became “deathly ill” after eating at Chipotle.

The Jason Bourne author went on to say his editor was in the emergency room for seven hours. The doctors concluded her illness was attributed to unsanitary food handling.

At the end of trading on Wednesday, Chipotle’s stock price closed at $401.05. However, during Thursday morning trading, the price dropped to a low of $386.10. While a corporate spokesperson has confirmed the company is aware of Van Lustbader’s post, there are no reports of food poisoning at Chipotle locations in New York.

“We are aware of the post made on Twitter, however there have been no reports of illnesses at any of our New York restaurants,” Chipotle spokesperson Chris Arnold told Business Insider. “Moreover, we have excellent health department scores throughout the city, and we continue to have the highest standards of food safety in our restaurants.”

Chipotle began a seemingly endless downward spiral late last year when customers across the nation were getting sick after dining at several different locations. An E. coli outbreak sickened more than four dozen customers in 14 states, and many locations closed. In December, more than 140 people were sickened from a norovirus contamination after eating at one location in Boston, Massachusetts.

Shares of the Denver-based food chain were trading at $750.40 on October 13 and have been steadily falling ever since. Revenues fell over 23 percent, to $834.5 million. In the first quarter, sales were down 30 percent at many locations.

Earlier this week, Chipotle had another significant hit to its public image. Top company officer Mark Crumpacker was arrested and charged with drug possession. According to the Denver Post, the 53-year-old executive was among 17 other buyers involved in a $75,000 drug ring.

Through wiretapped conversations, authorities heard Crumpacker request drugs be delivered to his apartment at least 13 times, with the most recent on June 18. He spent nearly $3,000 on cocaine during those transactions.

After the E. coli and norovirus outbreaks, Crumpacker led the way in the effort to restore Chipotle’s damaged image. The company has since placed the executive on administrative leave.

Chipotle has been working hard to get customers to forget its past food poisoning trouble. The company launched an extensive advertising and social media campaign to lure diners back. At a cost of almost $70 million, the Mexican chain gave away free burritos via mobile phone apps and mailed coupons. It also created a loyalty program earlier this summer.

Chipotle spent over $155 million on operating costs in the first quarter, nearly 37 percent more than the same period in 2015. The company has plans to spend even more on advertising in the upcoming quarters, said John Hartung, Chipotle’s CFO.

Ultimately, the company wants to eliminate the free burrito offers and bring customers in with other promotions. Menus nationwide will also be updated with new items, including chorizo.

In addition to increased promotions, Chipotle has been aggressively implementing stronger food handling policies. The company has changed many food preparation procedures and hired more safety consultants.

After the Chipotle food poisoning tweet, Van Lustbader was overwhelmed with tweets accusing him of stirring controversy without proof. Some suspected the author was trying to manipulate the stock price. However, Van Lustbader responded by tweeting he was only concerned with his editor’s health and nothing else.

While recovery for the fast-casual restaurant will take some time, tweets about food poisoning at Chipotle certainly do not help. Since the recent report of illness has not been definitively linked to the restaurant, it is possible the company will avoid yet another blemish on its already tarnished image.

[Photo by Andrew Renneisen/Getty Images]

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