Salmonella Outbreak Traced to Milk Costs Firm $3.5 Million

The parent company of Jewel Food Stores says the recent epidemic of salmonella food poisoning, caused by contaminated milk, has cost the firm $3.5 million.

The costs included the closing of the Hillfarm Dairy April 9 and disposing of dairy products on Jewel food shelves at that time, said Michael Miller, spokesman for the Salt Lake City-based American Food Stores Co.

The $3.5 million in losses are not covered by the firm’s current insurance provisions.

A total of 16,284 confirmed cases of the disease has been reported in Illinois and five other Midwest states since the epidemic surfaced early in April.

The losses triggered a reduction in American’s net earnings per common share for the 1985 first quarter from 78 cents to 67 cents. But despite the losses stemming from the epidemic, net earnings increased 5.5% over the 1984 first quarter and sales were up 2.2%.

Also confronting Jewel are hundreds of lawsuits and claims filed on behalf of salmonella victims.