Lifeway shares fall 18 percent

Shares of Lifeway Foods Inc. fell 18 percent in late trading yesterday after federal regulators stopped it from processing seafood and cream cheese at plants in Philadelphia and in Skokie, Ill., citing more than three years of violating food-safety rules.

Lifeway cannot start processing cream cheese and seafood at its Skokie and Philadelphia plants again until the Food and Drug Administration determines that it complies with safety rules under a consent decree signed by U.S. District Judge Wayne Andersen in Chicago, the FDA said in a statement yesterday.

Lifeway, chief executive officer Julie Smolyansky and her brother, chief financial officer Edward Smolyansky, are accused of failing to adequately label cream cheese, failing to document sanitation measures, and having inadequate control plans for seafood processing and distribution, the FDA said.

"We're more than happy to suspend production until they feel our plan and labels are correct," Edward Smolyansky said in a phone interview. "We'll fix them and move on."

The move will affect about 10 cream cheese varieties Lifeway manufactures at the Philadelphia plant only, as it does not produce either seafood or cream cheese at the Skokie facility, and has stopped producing most of the cited seafood products at those plants, the finance chief said. The plants have not been shut down, he said.

Lifeway fell as much as $2.33, to $10.36, in trading after the closing bell.