Cranswick has revealed that a Salmonella incident earlier this year cost the company more than £3 million ($3.6 million).
In a half-year results statement, which covers up to Sept. 24, 2022, the food producer said adjusted group operating profit was 1.7 percent lower at £68.4 million ($81.4 million).
This included a charge of £3.1 million ($3.7 million) due to costs associated with the product recall in May after Salmonella was found at the Hull cooked poultry facility in England.
The lower operating margin reflected the short-term lag in recovering inflationary pressure across several cost categories. Good progress is being made in managing and recovering these incremental costs, said Cranswick.
Recall and production halted
In May, Cranswick stopped production at the Hull plant after finding Salmonella. A routine internal inspection uncovered the problem in some cooked chicken products.
The company asked customers to withdraw any products containing ready-to-eat chicken produced during the affected period.
Products were sold as ingredients for sandwiches and meals in UK retailers and food-to-go outlets. A number of supermarkets including Marks and Spencer, Tesco, Waitrose, Aldi and Sainsbury’s issued recalls. As did Amazon, coffee shops Costa, Starbucks, and Caffé Nero, and the sandwich store franchise Pret A Manger.
Cooked poultry revenues were lower as a result of the recall as the factory was closed briefly whilst testing and remedial work was carried out but Cranswick said volumes continued to recover throughout the period.
Cranswick said it was also continuing to monitor events closely due to avian influenza with strict bio-security protocols enforced across all farms.
The UK poultry industry is experiencing the most virulent avian influenza season with record numbers of protection and captive bird monitoring zones in place. In early November, a nationwide bird housing order was introduced.
Adam Couch, Cranswick’s CEO, said the company had made progress in a challenging operating environment.
“Our unwavering focus on quality, value, innovation, and our people, along with our commitment to delivering great tasting food, created with a passion for our customers and the UK consumer, continue to drive our competitive advantage,” he said.
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