James Quincey, Chairman and CEO of Coca-Cola, attends a press conference with the President of the International Olympic Committee (IOC) and the CEO and Executive Director of China Mengniu Dairy, as part of the 134th session of the International Olympic Committee (CIO) at the SwissTech Convention Center in Lausanne, June 24, 2019.
Fabrice Cofrini | AFP | Getty Images
Coca-Cola CEO James Quincey said the company does not expect an outbreak of E. coli linked to McDonald’s harm the beverage company’s sales.
“When you look at what has been said in the media so far, in terms of the states that have been affected, I would say at this point it will not have a material impact on activity” , Quincey said of Coke’s third quarter. earnings call Wednesday.
McDonald’s is Coke’s largest restaurant customer, and the symbiotic relationship between the two companies has existed for nearly seven decades. Most recently, CNBC reported that Coca-Cola marketing funds contributed to McDonald’s this summer for its $5 meal, which includes a small soft drink, to make it more attractive to franchisees who might otherwise be wary of deep discounts.
“We’re an important partner of McDonald’s, they’re an important partner of ours,” Quincey said. “We will help them in any way we can as they deal with what is happening here.”
Tuesday, the Announcement from the Centers for Disease Control and Prevention that he linked an outbreak of E. coli in 10 states to McDonald’s Quarter Pounder hamburgers. The agency said 49 cases have been reported, including one fatality.
CDC investigators identified two ingredients as a potential cause: the burger’s onions and its fresh beef patties. Both ingredients are unique to Quarter Pounder burgers, although cooking the patty to the correct internal temperature should kill bacteria.
McDonald’s said in a statement Tuesday that Quarter Pounders will be temporarily unavailable in several Western states, including Colorado, Kansas, Utah and Wyoming, as well as parts of other states. The company also said it has asked all local restaurants to remove chopped onions from their supply and has suspended distribution of this ingredient in the affected area.
“We believe you can go to McDonald’s and enjoy our classics. We took swift action yesterday to remove the Quarter Pounder from our menu,” McDonald’s U.S. President Joe Erlinger said during the NBC’s “TODAY” show Wednesday morning.
At this point, it’s unclear what impact the outbreak will have on McDonald’s own sales.
The outbreak comes as consumers are generally spending less at restaurants, hurting both McDonald’s and Coca-Cola. McDonald’s and its fast-food rivals are banking on discounts in hopes the deals will bring back customers, while Coke is helping to market combo meals to boost its own sales.
Despite weak consumer spending, Coca-Cola’s third quarter profits and revenues exceeded Wall Street estimates, thanks to rising prices. The company’s shares fell more than 2% in morning trading.