Cadbury-Schweppes is the world's largest confectionery company. Among other brands, it owns Snapple, Dr. Pepper, Halls, Dentyne and that flagship product, Cadbury Chocolate. A week ago Barrons recommended it as a buy.

This is a cheap stock, and at some point we would expect some kind of financial engineering, such as a spinoff or sale of the beverage business.

Not so fast.

On Monday, the United Kingdom's Food Standards Agency contacted Cadbury about salmonella in its chocolate. Salmonella is a food-borne bacteria usually found in things like chicken and eggs and killed by cooking. It's particularly dangerous to children.

Apparently, the salmonella was even in the well-known Cadbury Easter Eggs. You know, the ones laid by Easter bunnies in the classic commercials in the U.S. Only the chocolate eggs in the U.K. are affected.

How did it get in chocolate? Apparently, some animal got into the Heredfordshire factory to drink the water from a leaky pipe.

It took until Thursday to recall the product. Cadbury is now facing legal action from both the FSA and local agencies in the U.K., as well as consumer backlash. News reporting is heavy in the U.K., where the recall is focused. U.S. interest has not been as strong.

Yet.

The shocking part of the story is that Cadbury knew about the salmonella at its factory since January. Cadbury's defense is that the levels in the chocolate were too low to cause illness, but the U.K. authorities suspect otherwise.

At least 53 people are known to have come down with severe stomach upsets after contracting salmonella montevideo, a rare strain of the disease.

This weekend the Health Protection Agency (HPA) confirmed molecular fingerprinting tests had shown that the bacteria that caused the outbreaks were the same as those contaminating some of its products. Last week the company, Britain’s biggest chocolate manufacturer, recalled 1m chocolate bars.

. . .

[M]icrobiological experts and official agencies said high levels of fat and sugar in chocolate made it an ideal vehicle for preserving salmonella and carrying it into the intestine. This meant that serious illness could be caused by what appeared to be mere trace levels of the bacterium

Cadbury is going to have its work cut out for it to recover from this incident over the next few months.