Federal Grand Jury Probing Chipotle’s Handling of Norovirus Outbreak in California

It’s been a bad few months for everyone’s favorite fast casual burrito chain–Chipotle. There’s been a lot of bad press about the company after numerous instances of food-borne illnesses across the country broke out, and Chipotle’s sales have taken a sharp dive. And most recently, it was announced that there will be a criminal investigation by the U.S. Attorney’s Office for the Central District of California, in conjunction with the U.S. Food and Drug Administration’s Office of Criminal Investigation, into the handling of a Norovirus outbreak in Southern California.

Chipotle’s food safety issues in 2015 included multiple instances of E.coli as well as Norovirus and salmonella. For example, during the second week of December, almost 150 Boston College students came down with Norovirus after eating at the chain. A large E.coli scare in October forced restaurant closures in Washington and Oregon. There were additional cases of E.coli tied to Chipotle in pretty much every corner of the United States, including California, Ohio, New York, and Minnesota. Earlier last year, in August, Chipotle customers in Minneapolis/St. Paul area fell sick with salmonella after eating at the chain.

The most disturbing part of these outbreaks, however, is that Chipotle doesn’t appear to be able to trace what is going on. Credit Suisse analysts told CNBC that Chipotle’s issues look different from other chains’ food scares in years past–including issues at Jack in the Box, Taco Bell, McDonalds– because the cause of the outbreaks have yet to be determined. The analysts said:

In all of the five historical cases just mentioned, the cause of the food safety issue was determined relatively quickly. As such, if CMG were able to identify the source of the E coli outbreak, that could help sales recover more quickly than we have modeled.

The health scares have also led to bad financial health for the Mexican chain–sales in the fourth quarter plummeted 14.6 percent, and sales at stores that have been open for at least a year fell 30 percent in December alone. Over the last year, the company’s stock has fallen by almost a third.

The criminal investigation is going to be focused specifically on a Norovirus outbreak in Simi Valley, California, and Chipotle has said that it will comply with the investigation. But it’s going to be a long road and a lot of work for the restaurant chain if it ever hopes to regain the trust it formerly had among its customers.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.