The horsemeat scandal that has rocked Europe since January continues to spread, with regulators in the U.K. making their first discovery of horsemeat in its restaurants. The latest discovery was made at Taco Bell, the Mexican-inspired fast food chain operated by Yum Brands (YUM).
For Yum, the timing of the discovery could not have come at a worse time. Late last year the company came under fire for contaminated chicken at Kentucky Fried Chicken locations in China. The problem involved high level of antibiotics in chicken from some of the company's Chinese suppliers.
China is a vital market for Yum, and the chicken scare led to a six percent drop in sales at the company's Chinese KFC restaurants last quarter.
Earlier this week the company announced that it was tightening its screening process, and today's horsemeat discovery is going to put an even bigger spotlight on the company's food quality.
In response to the positive test, Taco Bell has pulled ground beef from all its U.K. restaurants, and said it will not offer it on the menu again until it is satisfied that its suppliers meet the company's standards.
Taco Bell is just the latest food chain to fall victim to the horsemeat scandal that has spread across Europe. Other companies that have already discovered horsemeat in their food include Burger King (BKW), Ikea, Tesco, and Nestle.
Horsemeat, on its own is not harmful to humans, but it can contain medicines that are harmful to humans, most notably phenylbutazone (frequently referred to as bute). Taco Bell says that the tainted meat that it discovered did not contain bute, but that will do little to ease customer concerns over the possibility of eating horsemeat at its restaurants.
As the horsemeat scandal continues to spread, it is unlikely that Taco Bell will be the last brand to report finding horsemeat in its beef. How long this will last remains to be seen, but the good news is that for now it appears confined to Europe. We can only hope that future discoveries of horsemeat in restarurant food won't be in the U.S.
Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va. His articles typically cover big-picture events and forecasting what impact they will have on the stock market. In addition to writing for Fresh Brewed Media, Michael also wrote for AOL's BloggingStocks for three years, focusing most of his attention on the energy and technology sectors. Follow him on Twitter at @MFatMICenter.