Chipotle Mexican Grill Inc. said it plans to set aside up to $10 million to help local growers meet its new food-safety standards, as the burrito chain outlined for its employees its efforts to recover from disease outbreaks tied to its food that have roiled its business.

The company closed its roughly 2,000 restaurants on Monday so more than 50,000 workers nationwide could tune in to a meeting with executives in Denver, who explained new procedures for keeping pathogens out of its food.

Steve Ells, Chipotle's founder and co-chief executive, said new protocols for testing ingredients could be costly for small, local farmers, but he added: "We're there ready to help them."

"We'll continue to source the same high-quality ingredients, raised with respect for animals, environment and farmers," Mr. Ells told employees, according to the company's Twitter feed.

Chipotle has been reeling from a series of outbreaks involving E. coli and other pathogens that together sickened hundreds of customers nationwide last year.​​

The Centers for Disease Control and Prevention last week declared an end to two E. coli outbreaks, one that began surfacing in the Pacific Northwest last October before spreading to several states, and a second, smaller one it announced in late December. The CDC said it was unable to identify an ingredient responsible for either outbreak. The Wall Street Journal, citing people familiar with the investigation, reported last week that Chipotle believed the cause of the larger outbreak was beef imported from Australia.

In addition to the E. coli cases, Chipotle customers last year were sickened from a salmonella outbreak involving tomatoes in Minnesota as well as outbreaks of norovirus in California and Boston.​​

In December, Chipotle was served with a grand-jury subpoena as part of a federal criminal probe seeking information on the California norovirus outbreak. Chipotle last week said it received another subpoena broadening the investigation's scope, requiring Chipotle to produce documents related to companywide food-safety matters dating back to Jan. 1, 2013. As of Friday, Chipotle's stock was down 28% since late October. The shares were down more than 3% in afternoon trading on Monday.

Competitors took advantage of Chipotle's temporary closure on Monday with special offers. Moe's Southwest Grill, part of Focus Brands Inc., offered a buy-one-get-one-free deal in an effort to be Chipotle customers' "rebound burrito." Freshii USA Inc. offered half-priced Mexican food. Chipotle struck back with a deal of its own: customers who texted in the word "raincheck" during a certain window of time on Monday received an offer of a free burrito.

Write to Julie Jargon at julie.jargon@wsj.com

 

(END) Dow Jones Newswires

February 08, 2016 16:35 ET (21:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Chipotle Mexican Grill (NYSE:CMG)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Chipotle Mexican Grill Charts.
Chipotle Mexican Grill (NYSE:CMG)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Chipotle Mexican Grill Charts.