Israel foodmaker Strauss warns on profit after salmonella sparks recalls

JERUSALEM, May 12 (Reuters) - Israel's Strauss Group (STRS.TA) on Thursday warned that a recall of chocolate and other sweet products and the closure of a manufacturing plant due to salmonella would have a material impact on the food maker's 2022 financial results.

One of Israel's largest food producers, Strauss said it expects an impact of 115 million to 125 million shekels ($33-$36 million) to its first-quarter profit.

For the year, it projects a hit of 170-230 million shekels but stressed the figures are preliminary.

"The company's assessment is based on estimates of a decline in sales due to compensation to customers, costs of collecting products from stores" and other costs such as returning the plant to full production, Strauss said in a regulatory filing in Tel Aviv.

It noted that as of now, it could not assess the implications of any legal action regarding the recall and shutdown or the impact on its confectionary market shares.

Israel's Health Ministry in late April had ordered production suspended at a Strauss candy factory amid a recall that swept popular snacks off grocery shelves.

Strauss' plant, near the northern city of Nazareth, was temporarily shut after a routine inspection found traces of salmonella, a bacterium that can cause intestinal disease.

Strauss has recalled Elite brand chocolate and chocolate used as raw material, as well as wafers, snacks, gum, ice cream and toffees.

Israeli media reported that a number of children and adults have sought medical attention for suspected salmonella. Reuters was not able to immediately confirm the reports.

($1 = 3.4585 shekels)

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