Don't touch US peanuts

The Peanut Corporation of America (PCA) has filed bankruptcy after salmonella contamination in two of its three plants resulted in the largest product recall in US history involving more than 2000 products. A total of 637 illnesses are thought to be tied to the peanut butter salmonella outbreak and, according to the Centers for Disease Control and Prevention, the death toll resulting from this contamination is now nine. Company executives who run the peanut plant in Blakely, Georgia, may be facing criminal charges for neglecting to run a clean, safe peanut processing plant.

PCA handles only about 2.5% of all peanuts processed throughout the US but the salmonella contamination has caused a crisis for the entire industry. American food manufacturers use up to 900 million kilograms of peanuts per year in many different products including biscuits, crackers, cereal, confectionery, ice-cream, pet treats and more. More than 450 million kilograms of US peanuts go into peanut butter each year.

This year the US peanut crop was a record 2.6 million tons and growers were expecting that with the economic downturn consumers would follow their historical trend under these circumstances and increase their consumption of peanuts (peanuts being a cheaper protein source than meat, chicken and fish). But since the contamination and recall, sales of peanut products have plummeted with peanut butter sales already down an estimated 22%.

The outbreak has been linked to the practices of PCA in two places: a peanut plant in Blakely, Georgia, and another in Plainview, Texas. The company has denied doing anything wrong but the owner and a plant manager from the Blakely plant pleaded the Fifth Amendment and refused to testify at the Congressional Oversight hearings.

It seems conclusive that the two plants in question failed to maintain proper conditions and failed to adhere to the safety protocols and practices needed to safely manufacture food products so the question becomes: how was this situation allowed to develop?

It turns out that there have been noticeable failings in regulatory oversight. According to a recent report by Gordon Gibb on lawyersandsettlements.com:
“… it appears as if the outbreak began in Minnesota, and state health officials there did the groundwork that eventually traced the salmonella to peanut butter and, specifically, to the Peanut Corporation of America. The health department there attempted to enlist the help of the US Food and Drug Administration (FDA), but observers complained that state and federal officials could not agree.

By November, according to a CNN investigative report, the CDC in Atlanta was studying cultures, but was still not ready to conclusively identify a source months after state health officials in Minnesota had already suspected peanut butter from PCA.

A spokesperson for the CDC said the problem is a disconnect between federal regulators, and 50 states that all have their own protocols, policies and budgets.

Standards are also different. It was revealed that the last time the FDA had personally inspected the Blakely facility prior to the recall last month was back in 2001. Since then, it had relied on state health inspectors to do the work.

It has been reported that state inspection reports were lenient, and there was little follow-up due to lack of funding, staff and a huge portfolio of production plants and territories for each inspector.

In Texas, an inspector who had certified the PCA Plainview plant as qualified for organic production was fired by the Texas Department of Agriculture. That certification, for which the inspector claimed the company had provided needed documentation, came in November of 2005.

It wasn't until after the recall was announced that officials learned the plant did not have a valid state health certificate, and that the inspector had certified the plant using incomplete information.

Meantime, in a telling example of what is wrong with the food oversight system, PCA had reportedly hired a private company to inspect its facilities, and were told that their plants were 'exemplary'. Given current regulations that put the onus on food manufacturers to report problems to regulators, and not the other way around, it's little wonder regulators had to accept PCA at its word.

Now that PCA is filing for Chapter 7 bankruptcy protection, the question remains from whom plaintiffs can pursue damages.

Perhaps, state health inspectors, the FDA and the US government itself, for allowing such a convoluted system to remain in place.

Now nothing like this could happen in Australia or New Zealand, could it?