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Shares of IFF fall on lawsuit concerns

March 23, 2004
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Reuters reports that shares of International Flavors and Fragrances Inc., fell more than 7 per cent on Monday after a Wall Street Journal article stoked investor fears that more damages could follow a $20 million award against the company last week. Shares of New York-based IFF fell 7.7 percent, or $2.85, to close at $34, on Monday, after the Wall Street Journal article was published. It raised concerns that liabilities from the butter flavoring could hurt the fragrance maker''s profits. IFF earned $173 million last year on revenue of $1.9 billion. Last week, a Missouri jury awarded the damages to a plant worker who said he was injured by breathing the spray-on flavoring. IFF says the flavor meets regulatory standards for foods and drugs when handled properly. IFF said it would appeal the decision. In a filing last September, the company said it did not expect any adverse impact from the case. The worker who won was employed at a plant owned and operated by Gilster-Mary Lee Corp. in Jasper, Missouri. He and others sued in September 2001 but were denied class action status. IFF believes that any alleged injuries suffered by the plaintiffs are related to inadequate workplace conditions. In March last year, IFF and another flavor supplier were named defendants in a separate lawsuit by workers at a popcorn factory in Marion, Ohio. They alleged respiratory illness due to the butter flavors.
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