When you're hot you're hot, and when you're Whole Foods Market (NASDAQ: WFMI) you're ice cold -- and you're a health food store recalling beef provided by a supplier with a long history of USDA run-ins and a role in the latest outbreak of E. coli.
The Washington Post reports that "The meat Whole Foods recalled came from Coleman Natural Foods, which unbeknownst to Whole Foods had processed it at Nebraska Beef, an Omaha meatpacker with a history of food-safety and other violations. Nebraska Beef last month recalled more than 5 million pounds of beef produced in May and June after its meat was blamed for another E. coli outbreak in seven states."
Nebraska Beef's history of run-ins with the FDA is pretty remarkable: sanctions for problems including feces-contaminated carcasses, water from pipes dripping onto meat, and E. coli issues as far back as 1997.
That Whole Foods was unaware that it was acquiring its merchandise from such a questionable source raises serious questions about its quality control and sourcing -- those are two of the main reasons that many consumers are willing to pay a premium for Whole Foods products.
This is probably an isolated incident but, from a PR perspective, it's likely to be very damaging. With its reputation for being expensive (see Sarah Gilbert's Whole Paycheck) hurting sales in the current climate, Whole Foods is ill-equipped to deal with a scandal like this.
Apple Computer, Inc. (NASDAQ: AAPL) ended the day up 66 cents or 0.82%, finishing at $81.08. Again this has been a rather stable week for Apple, no doubt people are focusing more on the upcoming winter sales season before making heavier bets on Apple.
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