Rising Food Safety Concerns Puts Pressure On Margins

Food safety concerns have been on the rise since the horsemeat scandal earlier this year showed how little control many food companies really have over their supply chain. When something goes wrong and food is recalled, the loss of product is really the least of a company’s concerns, as damage to the brand and subsequent lawsuits quickly outpace the cost of the recall itself. Looking at recalls and other food safety incidents, Societe Generale SA (OTCMKTS:SCGLY) (EPA:GLE) analysts Carole Crozat, Yannick Ouaknine, and Niamh Whooley have found that the most exposed companies will see their margins fall as they struggle…