Dollarama recalled Heavenly Spices garlic powder after bacterial contamination found. DOL stock dipped 0.8%. No illnesses reported yet. Analyst says risk is contained unless broader supplier issues emerge.
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Dollarama recalled its Heavenly Spices garlic powder across Canada after testing found bacterial contamination that can cause diarrhea and vomiting. The recall covers specific lot codes sold at Dollarama stores, the company said in a notice posted Friday.
The stock slipped 0.8% on the session, though the move was mild relative to the broader TSX. Investors are weighing whether the contamination is an isolated production issue or a supply-chain problem that could hit multiple SKUs. Dollarama sources its private-label spices from third-party suppliers, and the company did not name the manufacturer.
Health Canada classified the recall as Class II, meaning the product poses a moderate health risk. No illnesses have been reported so far. Dollarama said it is working with the supplier to remove affected inventory from shelves and urged customers to return the product for a full refund.
For Dollarama, the recall arrives at a time when the discount retailer is already under margin pressure from rising freight costs and a weaker Canadian dollar. The garlic powder line is a small fraction of overall revenue, but a broader supplier issue could force the company to switch vendors or absorb higher costs for replacement stock.
Traders said the stock's limited reaction suggests the market views the recall as contained. "If this stays on one SKU and one supplier, it's a minor blip," one Toronto-based consumer analyst said. "The risk is if Health Canada finds the same contamination in other Heavenly Spices products."
The recall applies to 80-gram and 160-gram bottles sold between March and May. Dollarama has not disclosed the number of units affected. The company's next quarterly report is scheduled for mid-September.
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