Kerry pleaded guilty to a charge that it manufactured breakfast cereal under unsanitary conditions at a facility in Illinois, US. The company agreed to pay a fine of $19.228m, which the Department of Justice in Washington said is the largest ever criminal penalty in a food safety case.

The case arose from the 2018 outbreak of salmonella in the US, which was traced to Kellogg’s Honey Smacks breakfast cereal produced at the Kerry facility. The Center for Disease Control and Prevention linked 130 cases of salmonella to the plant.

According to the US Department of Justice, during the period between June 2016 to June 2018, routine environmental tests discovered salmonella at the plant approximately 81 times, with at least one positive test a month.

Employees at the plant failed to implement corrective actions to address the positive tests. The former director of quality for Kerry Inc is due to be sentenced separately next week.

In a statement, Kerry said that the company regrets the unacceptable practices and failures that occurred at the plant. Kerry closed the manufacturing facility after it was identified as the source of the outbreak.

Earnings

The statement released goes on to say that the fine will not affect the expected 2022 or 2023 Kerry Group earnings.

Speaking of Kerry earnings, the group is due to announce its 2022 financial results on February 16.

The latest trading update from the company in October last year highlighted the difficulties the inflationary environment posed during the year.

That update said the group expected adjusted earnings per share growth of 6% to 8% on a constant currency basis. Those kind of growth numbers will probably not excite shareholders or investors too much.

Kerry Group’s stock market performance has been far from encouraging this year, with the share price this week back to where it was five years ago when the salmonella problems first came to light.