Chipotle under criminal investigation
Things are not getting better for Chipotle in 2016, the company announced this week it is under a federal criminal investigation by FDA's Office of Criminal Investigations and the US Attorney’s Office for the Central District of California after being served with a subpoena in December last year.
In a regulatory filing with the US Securities and Exchange Commission, Chipotle says it will be required to produce a broad range of documents related to a company restaurant in Simi Valley, CA that experienced a norovirus incident in August 2015. Chipotle says it intends to fully cooperate with the investigation but is unable to determine or estimate any possible fines, penalties or additional liabilities that may stem from the investigation at this time.
The news comes as Chipotle is undergoing sweeping changes at its restaurants to improve food safety in an attempt to right itself after a multi-state E. coli outbreak was linked to the restaurant chain in November last year. This outbreak was followed by a norovirus incident in Massachusetts that sickened a number of students at Boston College. Following these troubles, Chipotle reported sales were down 30 percent for the month of December and the company is unable to reasonably able to predict sales for 2016.
The restaurant chain says it has taken aggressive steps to make sure its restaurants are as safe as possible. Specifically, the company conducted deep cleaning at the restaurants linked to this incident, replaced ingredients in those restaurants, changed food preparation procedures and provided all necessary supply chain data to investigators. The Mexican restaurant chain also hired IEH Laboratories and Consulting Group of Seattle, WA to help improve its food safety system.