Stockbrokers said Monde Nissin Corp. may suffer risks from consumer perception after it was reported that its flagship Lucky Me! pancit canton is being recalled in Ireland, France and Malta for having traces of ethylene oxide, a chemical commonly used to manufacture pesticides and disinfectants and is carcinogenic to humans.
The governments of Ireland, France and Malta recalled variants of the Lucky Me! noodle soup and pancit canton, particularly those manufactured between 2021 and 2022 in Thailand.
After the news broke out Thursday last week, Monde Nissin’s share price was down 9.44 percent at P13.04 apiece Friday, compared to its Wednesday close of P14.40.
Following the report, the company allayed concern on the product saying the chemical is used to treat spices and seeds to control microbial growth typical in agricultural products.
“These materials, when processed into seasoning and sauces, may still show traces of ethylene oxide,” it said last week.
Online stockbroker Colfinancial.com said the immediate impact of the product recall “appears to be minimal” as the instant noodle business contributes just 6 percent of the group’s Asia Pacific branded food and beverage business.
Colfinancial.com, however, said the company still has to contend with consumer perception risk of the Lucky Me! brand itself, which contributes 40 percent of sales, while the investigation of the local Food and Drug Administration (FDA) remains pending.
The Department of Health (DOH) said the FDA is ready to recall from the market instant noodle products that will be found contaminated with ethylene oxide.
“Whichever is detected by the FDA as having this chemical, they will be immediately removed from the market. Whichever affected specific batches and lot numbers are determined, they will be recalled from the market,” said Maria Rosario Vergeire, DOH undersecretary.
Stockbroker Abacus Securities Corp. said a clearer impact of the news will be seen when Monde Nissin reports its third quarter results.
