Kraft Recall May Resemble Kellogg's Earlier Problem
Kraft Foods Group Inc (NASDAQ: KRFT) rose nearly 2 percent Wednesday after it recalled close to a quarter-million boxes of macaroni and cheese on reports of small pieces of metal inside some packages.
Food industry recalls are common and their affects on companies shares are typically transitory.
The Kraft recall Wednesday may be reminiscent of Kellogg Company (NYSE: K)'s October 2012 recall of 2.8 million boxes of cereal after metal fragments from faulty manufacturing equipment were found inside packages.
Kellogg shares fell briefly on that news, but ended 2012 with healthy gains in its share price.
Results of food scares aren't always so benign however.
Privately held Peanut Corp. was forced into bankruptcy by lawsuits in 2009 after it got tagged as the source of a massive salmonella outbreak in 2007 and 2008.
The restaurant chain Yum! Brands, Inc. (NYSE: YUM)'s shares have barely recovered since a series of food scares last year in China held back Yum's Asian sales; the company's shares lost what had been impressive momentum.
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