Greenyard stock plummets 30 % at market opening

Greenyard stock plummets 30 % at market opening

The share price of Greenyard, the Belgian vegetable supplier, fell by as much as 30 percent when the stock market opened today. Greenyard is implicated in a case involving contamination of its products by the listeria bacteria, which has killed nine people in three years in several European countries.

Trade in the Greenyard share resumed on Monday morning, opening at 8 euro. In the afternoon the stock even dropped to 7.5 euro: a loss of 35 percent. According to De Tijd, the price drop is the largest since the company’s stock market flotation in 1999. The share is at its lowest level since the summer of 2012.

The listeria contamination, found in frozen vegetables from Greenyard in Hungary, unleased a serious predicament for the company on Friday. When reports appeared that dozens of patients with foodborne infections, of whom nine died, were linked to vegetables from Greenyard, the price of the company dropped by 10 percent. The Financial Services and Markets Authority (FSMA ), the financial regulatory agency in Belgium, called for the suspension of trading in Greenyard Foods’ shares on the Brussels Stock Exchange.

The Belgian vegetable supplier responded this weekend that there was still no clinical proof that the fatalities resulted from eating the frozen vegetables. But that did not convince the market. Investors were also anxious about the financial consequences of the incident, to what extent the company is insured and, above all, what the damage to its image and reputation will be.

A key question is why Greenyard had not informed the public about the fatalities. This information had been known since 3 July, when the European Food Agency (EFSA), in a press release, sounded the alarm about the listeria infection and the fatalities. Listed companies are obliged to publish price-sensitive information.

Yet Greenyard remained silent about the victims in its own reporting. On 4 July, the company communicated problems at one of its sites in Hungary, but it did not refer to the EFSA’s message,  a day earlier.

Arthur Rubinstein
The Brussels Times

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