Fisher Capital Management Warning: Kellogg Gets Second FDA Warning on Listeria in 2 Years

A Kellogg Co. (K) cookie plant in Augusta, Georgia, was found to have a “persistent strain” of listeria during a February inspection, including on food-contact surfaces, according to a warning letter from U.S. regulators.

The Food and Drug Administration letter, dated June 7, was sent less than two years after a Kellogg Eggo waffle plant in the same state was shut for similar reasons.

The inspection found flies and pools of water, the FDA said. The letter from District Director John Gridley didn’t say that any products were tainted with listeria, yet said they were “adulterated” and “may have become contaminated with filth.” The Augusta plant makes Keebler and Famous Amos cookies, and is one of five cookie bakeries Kellogg operates in North America.

“While the FDA did not identify specific concerns with the food, we take this situation very seriously,” Kris Charles, a spokeswoman for Battle Creek, Michigan-based Kellogg, said in an e-mail. “We have undertaken a number of aggressive actions to address their concerns including comprehensive cleaning and extensive testing.”

Kellogg’s response didn’t include dates for taking action at the plant, the FDA said. The regulator gave Kellogg 15 days to outline specific remedies to avoid injunction or product seizure.

Eggo Production

Kellogg’s cookies are baked at a temperature high enough to kill any listeria present, according to Robert Gravani, a food science professor at Cornell University in Ithaca, New York. The lack of an FDA product recall suggests that listeria was not found in the cookies, he said. FDA spokeswoman Tamara Ward declined to comment on a potential recall.

Listeria is a bacterium found in prepared foods and soil that can cause a serious infection in humans called listeriosis. It is particularly harmful to pregnant women, the young, the elderly, and people with weak immune systems, according to the FDA’s website.

Kellogg, the largest U.S. maker of breakfast cereals, fell 45 cents to $54.96 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 7.6 percent this year.

The FDA in January 2010 ordered Kellogg to improve sanitation controls at the different Georgia plant after Eggo buttermilk waffles were found contaminated with listeria bacteria. That, along with flooding and equipment changes at another waffle factory in 2009, slowed production for months and caused Eggo’s market share to drop.

Kellogg in June 2010 voluntarily recalled about 28 million boxes of cereal including Froot Loops and Honey Smacks, citing unusual taste and odor coming from the liner of packages. The recalled boxes were made at an Omaha, Nebraska, facility. North American cereal sales dropped 5 percent in 2010, partly because of the recall.

To contact the reporter on this story: Matthew Boyle in New York at Mboyle20@bloomberg.net.

To contact the editor responsible for this story: Steve Walsh at swalsh@bloomberg.net