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Wednesday, December 24, 2003 - Page updated at 12:44 A.M.
Disease fears hit beef industry stocks
By Randi F. Marshall
A wave of fear swept over the cattle and beef industries this evening as reports emerged of the first-ever U.S. case of mad cow disease.
The impact of the Washington state case could be far-reaching, potentially affecting sales at fast food spots and upscale steakhouses alike, as well as exports abroad.
Investors quickly sent stocks of fast-food hamburger chains falling in after-hours trading Tuesday. Shares of McDonald's Corp., the largest fast-food hamburger chain, dropped as much as 4 percent to $24.20.
In a statement tonight, McDonald's spokeswoman Lisa Howard said the company's supply was entirely separate from the reported case of mad cow disease.
"The meat packer in question has no connection whatsoever to McDonald's supply chain," Howard said. McDonald's has been through this before.
When mad cow disease broke out in Europe and Japan, McDonald's, which has restaurants across the globe, saw significant drops in sales, though its beef was never found to have the disease directly. Among other big losers in after hours trading were Wendy's International Inc., down 2.7 percent, and Lone Star Steakhouse, off 9 percent.
Wendy's did not return calls for comment, nor did Tyson Foods Inc., the world largest meat processor, whose stock fell modestly. Tonight, U.S. Agriculture Secretary Ann Veneman assured Americans that the country's beef supply remained safe, and a statement from a beef industry trade group, the National Cattlemen's Beef Association, said it hoped exports wouldn't be affected.
But that hope was quickly dashed as Japan's Ministry of Agriculture said it will ban imports of U.S. beef if a case of "mad-cow" disease in this country is confirmed. The U.S., Japan and 20 other nations banned imports of Canadian beef when mad cow disease was discovered there in May.
And public perception could affect the industry here, even at finer restaurants and well-known steakhouses. At Smith & Wollensky in Manhattan, manager Tim Duffy seemed unfazed.
"I wouldn't expect to see any changes at all in the public perception of beef," Duffy said today, amid the din of a crowded restaurant. "The uneducated consumer might fret about it and stay home, but I don't feel our clientele would change their plans."
Duffy said he expected his staff to carefully watch the situation and thoroughly check the meat that came into the restaurant, as they do on a regular basis. Customers, he said, "should be rest assured that our beef is in good shape."
"We're not going to accept anything that's questionable," Duffy added.
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