Contamination bites huge chunks of Greenyard's value

Vegetable producer Greenyard is under attack after a listeria contamination in its Hungarian factory. The company says to have taken all necessary measures, but the share price plummets.

Further research is necessary

At the end of last week, the European food agency announced that nine Europeans had died in the past three years after having eaten listeria-contaminated frozen vegetables from the Greenyard plant in Hungary. The victims fell in Austria, Denmark, Finland, Sweden and the United Kingdom. Frozen products were recalled in Belgium, from the brands Pinguin, D’Lis, Delhaize, Everyday Selection and Boni.

According to the company, further research is necessary and it claims to take every additional measure to guarantee food safety. This includes recalls, closing the Hungarian production site and additional testing and analyses. This recall does not mean that the products are infected, says the Belgian company. Greenyard is currently in contact with the relevant authorities to assess further information about the contamination. “We fully support further research, since food safety and consumer health are our first priority.”  

For the listed company, this incident is a serious blow: the share price has already dropped by 30 %. The producer claims to be insured for recall costs and product liability, but analysts fear the company gives its investors not enough information about the possible impact, while having limited financial breathing space.