Response to Mad Cow Disease Discovery in U.S. On December 23, the media reported the discovery of a cow infected with mad cow disease in Washington state. The U.S. Secretary of Agriculture announced that the cow had been discovered before it could infect the beef supply. This was, however, the first reported case of mad cow disease in America. Wendy's released a statement that its meat was safe and that the infected cow was a "downer" cow, or a cow that could not walk. In its statement, Wendy's announced that it has a strict policy prohibiting the use of downer cows in its beef supply. Burger King and Arby's released similar statements that their meat was unaffected and that their policies prohibited the use of downer cattle for their beef supply.
Meanwhile, the stock market responded to the news by selling off shares related to beef products and restaurants. On Friday, Reuters reported that the stock price of Tyson Foods, a beef processor, was down 27 cents, or 2 %. McDonald's and Wendy's, however, appeared to be recovering. Business Week online also reported that the outlook was lowered for beef industry stock. Among the most important questions for determining the effect of this case on the industry is whether this discovery is an isolated incident.
Posted by franchiselawblog at December 29, 2003 10:58 AM