The restaurant industry surveyed the landscape after Tuesday’s announcement of the first confirmed case of mad cow disease in the United States and issued cautiously optimistic appraisals.

“Until we know any more in terms of the escalation of the seriousness of it, we need to stress that the American beef supply is safe,” said Mark Bromberg, chairman of Irving, Texas-based Metromedia Restaurant Group.

Privately held Metromedia owns and operates the Steak & Ale, Ponderosa Steakhouse and Bonanza Steakhouse chains, as well as the Bennigan’s chains. Bromberg said that none of Metromedia’s restaurants use beef from the Washington state area where the infected cow originated.

Bromberg and others said that, unless more cases are confirmed or it turns out infected beef did make its way into the national food supply, the effect on the restaurant industry is likely to be minimal – even beneficial because it could drive down soaring beef prices.

Still, skittish investors sent a number of restaurant stocks lower, including the major burger chains.

McDonald’s confirmed that none of its beef comes from Washington, but its shares fell $1.32, or 5.22 percent, to end the day at $23.96.

Wendy’s International Inc. shares declined $1.87, or 4.72 percent, to close at $37.79. Jack In The Box Inc. fell $1.24, or 5.64 percent, to $20.76 and Sonic Corp. slipped 4.93 percent, or $1.53, to $29.51.

Louis Adams, a spokesman for Dallas-based Brinker International Inc., said that none of its restaurants serve Washington beef, and he doesn’t expect customers to abandon burgers and steaks.

“We’re not anticipating customers coming into our restaurants and ordering any differently than they usually do,” said Adams, whose chains include Chili’s Grill & Bar. Brinker shares fell 18 cents to $32.65.

Jonathan Bernstein, president of Los Angeles-based Bernstein Crisis Management LLC, said restaurants need to respond carefully to consumers’ concerns.

“I think they should have their hosts and hostesses prepared to answer questions and just give a little flyer handout to anyone who asks,” he said. “I don’t think they need to spread the concern more by being proactive about it.”

But when customers do ask, restaurants need to make it clear that their food is safe, he said. “They need to translate some of the jargon that has been put out there by the FDA,” Bernstein said.

He noted that the disease is generally confined to the nervous system of the cow and isn’t transferred to the cuts of meat that end up on most diners’ plates. But the government has not done a good job of making that clear, which means it’s up to the restaurants to reassure their customers, Bernstein said.

Many analysts issued reports saying that Wednesday’s selloff represents an opportunity for investors.

“This is likely a positive for 2004, when several larger restaurant chains lock in contracts on beef and will be able to do so at lower prices,” wrote Matthew DiFrisco at Harris Nesbitt Corp, according to Dow Jones Newswires. He said the May mad cow scare in Canada “caused a knee-jerk reaction but no real long-term impact on either stock prices or overall consumption of beef.”

Bromberg said lower beef prices would be a relief to many restaurants.

“Coincidentally, we’re in one of the highest-priced beef markets in ages,” he said. “My suspicion is that what this will do is act naturally to bring the price of beef down.”

Banc of America Securities analysts Andrew Barish viewed the long-term impact of the mad cow announcement as minimal – assuming the disease has been contained.

“Restaurant stocks are likely to react negative near-term, particularly with light holiday trading volumes potentially exacerbating moves,” he wrote in a report Wednesday. “We would expect declines of 5 percent to 10 percent over the next couple of sessions as the market digests this news and waits for more details. Based upon the recent Canadian situation, we expect beef demand does not materially change.”

But Biernat said that restaurant companies and owners clearly would rather not be facing this issue and worries about diners’ reaction.

“I just hope this doesn’t deter them in any way because it’s been a great year,” he said. “The economy is back and everyone’s weathered the tough times. And this is the last thing we need to hear.”

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(c) 2003, The Dallas Morning News.

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AP-NY-12-24-03 1900EST