Canada’s Maple Leaf Reaches Deal to Settle Listeria Lawsuits

December 19, 2008

Maple Leaf Foods said Thursday it has agreed to settle class-action lawsuits related to an outbreak of listeriosis food poisoning caused by contaminated deli meats processed at its Toronto plant.

The settlement, which still requires court approvals in Saskatchewan, Quebec and Ontario, is set at C$25 million (US$20.4 million) but could increase by C$2 million (US$1.63 million), the company said.

The class actions were launched on behalf of people who consumed or purchased products that were recalled in August 2008 due to possible listeriosis contamination. The meats have been linked to at least 20 deaths this year.

Many more who were sickened and or hospitalized are also included in the class action suits.

Maple Leaf, one of Canada’s largest meal processors, said the settlement is fully funded by its liability insurers.

Robert Gibson, a retail analyst at Octagon Capital, said the swift settlement of the lawsuit enables the company to focus its attention back on the business. “This is amazing. It was a dark cloud hanging over them and now it’s done,” he said. “A lot of class actions take years to settle.”

After an extensive investigation, the company said it believed two slicers at its Toronto plant had been harboring the listeria bacteria.

After a month-long shutdown, the plant was allowed to operate while officials from the Canadian Food Inspection Agency tested samples of all meats produced.

Chief Executive Michael McCain said in October the outbreak had cost the company about C$33 million (US$26.9 million) in the third quarter from product recalls and sanitation.

“Our goal throughout this legal process has been to negotiate a fair and early settlement so that we can obtain court approvals and promptly compensate families who were affected,” McCain said in a release.

“This was a tragic experience and I want to acknowledge the cooperation of all the parties involved to ensure that people affected receive timely restitution.”

The company was not immediately for additional comment Thursday.

Shares in the Toronto-based company were down 2.1 percent at C$11.00 in Toronto.

(Additional reporting by Scott Anderson in Toronto) ($1=$1.226 Canadian) (Reporting by Susan Taylor; editing by Peter Galloway)

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