Nestlé's Inspectors Saw Rat Droppings, Rejected Peanuts

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By Lyndsey Layton
Washington Post Staff Writer
Friday, March 20, 2009

Nestlé USA, considering whether to buy ingredients from Peanut Corporation of America, twice sent its own inspectors to check out the company. Both times, they rejected the company after finding sanitary problems at its facilities in Georgia and Texas, noting rat droppings, live beetles, dead insects and the potential for microbial contamination.

It proved to be a good call.

Today, Peanut Corporation of America stands accused by federal investigators of knowingly selling peanut products contaminated with salmonella bacteria, which triggered a criminal investigation, the largest food recall in American history and an outbreak of illness that has sickened at least 691 people and killed nine since September.

Kellogg and other companies that bought products from Peanut Corporation of America told lawmakers yesterday that unlike Nestlé, they did not perform their own inspections. Instead, they relied on third-party audits common in the U.S. food industry.

David Mackay, Kellogg's chief executive, said his company trusted audits performed by the American Institute of Baking International, the biggest food-inspection firm in the country. The institute conducted scheduled inspections of PCA's facilities and never flagged serious problems. It issued a "certificate of achievement" and a "superior" rating last August, when PCA was getting results from internal laboratory tests that revealed a salmonella problem in its plant in Blakely, Ga., congressional investigators said.

"They gave PCA glowing reviews," said Rep. Henry A. Waxman (D-Calif.), chairman of the House Energy and Commerce Committee. "The company was selected by PCA, paid by PCA, and realized that if they didn't give PCA a glowing review, they were not going to get hired again.

"They gave PCA a certificate of achievement," added Waxman, who held up the certificate in one hand and with the other waved a photograph, taken by federal investigators, of dead rodents inside a PCA facility. "How do you have a company that looks like this getting a certificate of achievement? . . . It really makes you think there must be something wrong."

E-mails released by the committee showed a comfortable relationship between the auditor for AIB and PCA's plant manager. In one e-mail, the auditor tells the plant manager to get the plant ready for inspection, asks the manager to select the date and then offers holiday wishes to the manager and his family.

Brian Soddy, vice president of marketing and sales for AIB, defended the audits in a telephone interview yesterday and said that PCA "went to great lengths to clean it up" before scheduled inspections. Others, including Georgia state inspectors, had also missed problems in PCA's facilities, he said.

AIB conducted basic annual audits at a cost of about $1,000 for PCA. It offers more rigorous inspection services, including a multi-year program at a cost of $20,000 to $30,000, but that was not part of its contract with the peanut company, Soddy said.

Rep. Bart Stupak (D-Mich.), chairman of the panel's oversight and investigations subcommittee, asked why Kellogg and other companies did not investigate their suppliers.

"Nestlé didn't solely rely on an auditor selected by PCA and paid by PCA," he said. "It conducts its own audit with its own staff. You all talk about how safety is the number one issue. Why didn't you do the same thing?"

Kellogg, which has lost about $70 million because of the recall, is now sending its own inspectors into peanut-processing plants and is no longer relying on third-party firms paid by the processors, Mackay said. He said that Kellogg follows that procedure for other raw materials and foods that carry high risks for contamination, but that it is impossible for Kellogg to inspect each of its 1,000 suppliers. And although food companies bear some responsibility to ensure their supplies are safe, they are powerless against a dishonest supplier, he told lawmakers.

"On every batch, we received a certificate of analysis from PCA, and every batch [was] negative" for salmonella, he said. "It's extremely difficult when you have an unethical and dishonest supplier to manage this."

Starting in 2007, Kellogg purchased $5 million to $10 million worth of peanut ingredients annually from PCA and used them in its Keebler cookies and crackers, Famous Amos cookies and Austin peanut butter crackers, among other items, Mackay said.

Yesterday's hearing was the third held by the committee into the scandal surrounding PCA, which filed for bankruptcy protection last month. The case has called national attention to food safety and has sparked dozens of proposals for reform on Capitol Hill. President Obama, who has expressed concern about the peanut butter sandwiches consumed by his 7-year-old daughter, has flagged food safety as a priority. His proposed budget includes additional money for food inspectors at the Food and Drug Administration, and he has created a White House working group to recommend ways to increase food safety.

The outbreak of salmonella illness is ongoing, although officials at the Centers for Disease Control and Prevention say the number of new cases has declined substantially. They said they expect new illnesses to be reported for the next several months, because some recalled items have a long shelf life and remain in home pantries and in some stores. The FDA does not require retailers to prove that recalled food has been destroyed and has no way to know how many of the more than 2,000 recalled products are still in circulation.

Consumers can check the searchable database for recalled products at http://www.fda.gov.


© 2009 The Washington Post Company

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