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Fri 23rd Jan 2015 - M&B fined £1.5m over food poisoning death; McDonald's revenues drop 7% in Q4
Mitchells & Butlers fined £1.5m over Christmas dinner food poisoning death: Mitchells & Butlers has been fined £1.5m today after being found guilty of placing unsafe food on the market over the death of a woman following a food poisoning incident at an Ember Inns pub in Hornchurch, Essex. At the same time the pub chef and his manager have been jailed at Snaresbrook Crown Court for 12 months and 18 months respectively over their part in the poisoning. Della Callagher, 46, died two days after eating the four-course Christmas meal at the pub, the Railway Hotel, in December 2012, which left a further 33 people ill. Havering Council carried out a year-long investigation into the incident, which found that the food poisoning was caused by Clostridium perfringens bacteria, which was present because the turkey meat was either not cooked or not reheated properly to a safe temperature. Mehmet Kaya, the pub's chef, and Ann-Marie McSweeney, the manager, hindered investigations into the food poisoning incident by forging records relating to how the turkey meat had been cooked, Havering Council said. At a trial in November, M&B admitted selling food unfit for human consumption but argued that it took reasonable precautions to prevent the offence. However, a jury returned a unanimous verdict that the company failed to comply with the requirements. Kaya and McSweeney were found guilty of perverting the course of justice. In a statement today, M&B said: "We deeply regret this matter and have taken it extremely seriously. As soon as we learnt of the incident, M&B conducted a full and thorough independent investigation and referred our findings to the London Borough of Havering immediately. This prompted further investigation by the local authority and ultimately led to today's outcome. We have continued to co-operate fully with the local authority throughout this process. This case also relates to the conduct of two former employees who today received custodial sentences for perverting the course of justice. The individuals concerned had committed acts which were not in accordance with Mitchells & Butlers' food safety procedures and practices. The conduct for which they have been found guilty, and have now been sentenced, was entirely their own actions and in no way represents conduct acceptable to, or condoned by, M&B. Food safety is our highest priority and we have robust due diligence procedures in place that all our employees are required to follow. The prosecution accepted that these procedures, if they had been properly followed by those involved at the time, would have prevented this terrible event but we have nevertheless conducted a detailed assessment of our policies, procedures and training since the incident to identify any possible improvements. We will continue to review our procedures to ensure they remain robust."

McDonald's to cut capex and openings as revenues drop 7% in Q4 with warning of more falls in January: McDonald's has unveiled a drop of 7% in global revenues for the fourth quarter, to $6.57bn, with global operating income down 20% to $1.751bn after a weak performance in the United States and the impact of the supplier scandal that hit the company in China. At the same time its chief executive, Don Thompson, warned that like-for-like sales were likely to be negative this month compared to January 2014. The company said global like-for-like sales were down 0.9%, in the fourth quarter, reflecting falling customer number "in all major segments". For the full year, global like-for-like sales were down 1%, consolidated revenues were down 2% – flat in constant currencies – and consolidated operating income was down 9%, or 8% in constant currencies, at £7.949bn. In the US, fourth-quarter like-for-like sales fell 1.7% and operating income dropped 15%, hit by falling customer numbers, greater competition and higher costs as the company began repositioning its operations. In Europe, while the UK saw positive comparable sales and operating income results, overall fourth-quarter like-for-like sales fell 1.1% and operating income dropped 14% (down 6% in constant currencies) as consumer confidence issues, particularly in Russia and Ukraine, and weakness in France and Germany hit income. Pete Bensen, McDonald’s chief financial officer, said the company would be cutting capital expenditure to $2bn, the lowest level for five years, and targeting fewer openings in its "most challenging" markets. Overall sales by company-operated restaurants for the fourth quarter were down 9% at $4.296bn, with revenue from franchised restaurants down 3% at $2.275bn. For the year, sales by company-owned restaurants were down 4% to $18.169bn, and revenue from franchised restaurants was flat at $9.272bn. Thompson warned shareholders: “Our business continues to face meaningful headwinds. Results are expected to remain pressured, particularly in the first half of the year." However, he said: "I remain confident that we can regain our momentum and build value for shareholders over the long term.” The company had 14,350 restaurants in the US at 31 December 2014, up 72, and 7,855 in Europe, up 253, including 1,241 in the UK, up 19. The total number of McDonald's restaurants rose to 36,258, up 829.

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