Saputo CEO Lino Saputo Jr.Paul Chiasson
Canadian cheese giant Saputo Inc. is continuing to investigate the cause of a Listeria bacteria contamination that prompted the company to voluntarily recall several lots of cheese from an unidentified Quebec plant.
Canada's largest cheese processor said production has been redirected to another facility while it cleans up the problem.
"We continue to investigate to find out the root cause of the problem and to make sure that we can put the necessary measures in place," Sandy Vassiadis, director of corporate communications, said in an interview on Monday.
The Montreal-based firm announced Friday evening that it has recalled Faith Farms Ribbon Slices process cheese sold in two kilogram packs with a best before date of May 5, 2011.
The contamination involves 11,000 kilograms of processed cheese from five lots that was discovered through routine testing, Ms. Vassiadis said.
The cheese was sold through cash and carry and deli stores, and may also have been sold to food service institutions like restaurants, hospitals, day care centres and nursing homes.
The product was distributed in Quebec, Ontario, New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador.
A battery of tests has determined that the contamination was restricted to the five lots of cheese from a single production line, Ms. Vassiadis said.
Industry observers said they expect the costs of the recall on Saputo's reputation will be minimal, provided the incidents are contained to the one line.
The recalled cheese is worth less than $200,000 and there have been no reported illnesses.
Martin Landry of Desjardins Securities said that Faith Farms is a minor brand for Saputo that accounts for less than 1 per cent of company-wide sales.
"Nonetheless, Saputo's overall brand and reputation could be under threat, depending on the length and breadth of the recall, as well as the media coverage," he said in a report.
Severe cases of Listeria contamination can be fatal, particularly for people with poor health.
The biggest food recall in Canadian history involved a 2008 contamination of processed meats made at a Maple Leaf Foods plant in Toronto. The listeriosis outbreak was blamed for 20 deaths across Canada.
James Durran of National Bank Financial said the Maple Leaf Foods recall is fresh in the minds of Canadian consumers.
But Faith Farms is not a retail brand and no Saputo plants have been closed may indicate "the overall volume impact should be negligible."
"If the recall spread to other products or if health issues began to emerge we'd expect to see a greater volume impact due to consumer fears over using Saputo products in general. At this time, we have no reason to expect such an outcome."
Analysts said they expect Saputo shares would be under pressure on Monday, the first trading following the recall announcement.
Mr. Landry cautioned investors to wait for "more clarity on the full impact of this recall before buying Saputo's shares."