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J P Morgan

and their pawn John Ivankoe

.. they say for slaughterhouses

'I am ho'

....*********

..

Mad cow scare hurts restaurant, food stocks

Shares in McDonald's, Wendy's, Tyson, Outback, others tumble after disclosure of Canadian case

By Dave Carpenter

Associated Press



Shares of big U.S. hamburger chains, other restaurant operators and meat processor Tyson Foods Inc. tumbled Tuesday following the disclosure of the first case of mad cow disease in Canada in a decade, as investors feared people would shy away from eating beef.



In a bid to ensure that the brain-wasting disease doesn't appear in the United States, U.S. health officials promptly banned imports of cattle, beef, beef-based products and animal feed from Canada.



But analysts said the appearance of the disease in a cow in Alberta, as announced by Canadian agricultural officials, raised concern because it had been thought unlikely to appear in either Canada or the United States because of safe feeding practices.



Shares in McDonald's, the world's largest restaurant company, fell $1.21, or 6.7 percent, to close at $16.95 in heavy trading on the New York Stock Exchange. Some 26.7 million shares were bought and sold, nearly quadruple the average daily volume.



Also sinking were fast-food rival Wendy's International, down $2.01, or 6.6 percent, to $28.55, and Tyson, the world's largest meat company, down 46 cents, or 4.9 percent, to $9.01.



Nervous investors also pushed the stocks of some other restaurant companies modestly lower. The stocks of Outback Steakhouses, Jack in the Box, Applebee's International, Bob Evans restaurants and drive-in operator Sonic Corp. all fell from 2.5 percent to 3.7 percent.



McDonald's, with restaurants in more than 100 countries, has seen its business hurt from other mad cow disease scares even though its beef has never been implicated in the disease. Sales were affected in Europe in 2000-01, and more recently in Japan, where monthly sales plunged by as much as 18 percent at some outlets from the previous year.



U.S. companies quickly issued statements trying to put any potential consumer fears about their meat to rest.



``McDonald's worldwide has the highest beef safety standards and will continue to strictly enforce them,'' the Oak Brook, Ill., company said. ``McDonald's Canada only purchases beef from facilities federally inspected and approved by the Canadian Food Inspection Agency.''



The company emphasized that it does not import beef from Canada.



Outback Steakhouse said its restaurants serve only USDA top choice or prime U.S. Midwestern grain-fed beef, raised and fed in compliance with strict U.S. regulations designed to prevent mad cow disease.



``The discovery of one cow is concerning, even though it did not enter the food chain, as the discovery of other cases is possible,'' said John Ivankoe, restaurant analyst for J.P. Morgan, in a note to investors. ``We will wait for new news regarding this story, but if confidence regarding the beef supply in only Canada is shaken, it is a relatively minor issue.''