Sysco warns customers of contaminated onions; first lawsuit filed against McDonald’s

Shares of Sysco (NYSE:SYY) are losing ground as the fallout from McDonald’s (NYSE:MCD) E. coli contamination reverberates throughout the food industry.

In an emailed statement cited by Bloomberg, Sysco (SYY) warned customers about Taylor Farms’ onion recall.

“The company will continue to closely monitor the situation, to work with regulatory authorities in their ongoing investigation, and to follow through on any additional actions required,” according to a statement viewed by Bloomberg.

Shares of Sysco (SYY) are lower with US Foods Holding (USFD), United Natural Foods (UNFI), and SpartanNash (SPTN) all lower in sympathy.

In related news, a Colorado man reportedly made sick by a contaminated Quarter Pounder has filed the first lawsuit against McDonald’s (MCD).

The suit, filed in McDonald’s headquartered state of Illinois, accuses the hamburger chain of “product liability, negligence, and breach of implied warranties.”

In a statement to the press, the plaintiff’s attorney said “The McDonald’s E. coli outbreak will be one of the most significant food poisoning outbreaks this year. Through this lawsuit and others, we will make sure that all of the victims are compensated for their losses.”

McDonald’s deep pockets will undoubtedly encourage a flood of lawsuits seeking multimillion-dollar settlements. For comparison, the largest payout for an E. coli contamination was a $50M class action settlement against Jack in the Box (JACK) in 1993 in which four children died and 732 people were infected. In 2020, Chipotle (CMG) paid $25M in a criminal fine to resolve charges that its contaminated food sickened more than 1,100 between 2015 and 2018.