Washington, March 20 - Democratic lawmakers on Thursday scolded U.S. firms that purchased now-recalled peanut products for failing to ensure the goods were safe and relying on audits from a firm that had links with the Peanut Corp of America, which made the tainted products.
Kellogg Co , King Nut Corp and Vitamin Cottage Natural Food Markets Inc defended their oversight of purchased products and said it was common practice in the food industry to rely on a third party to conduct audits.
The U.S food industry has been shaken by a salmonella outbreak tied to peanut products that led to the recall of more than 3,400 products, from crackers to ice cream. It was the largest food recall in U.S history.
An estimated 700 people became ill and nine died after eating contaminated peanut products with ingredients supplied by Peanut Corp.
"There were some red flags you should have noted," Henry Waxman, chairman of the House of Representatives Energy and Commerce Committee, said at a subcommittee hearing. "PCA was a bad company and they did bad things, and they were clearly ignorant ... but this indicates to me that Kellogg was pretty sloppy."
David Mackay, chief executive of Kellogg, told lawmakers his company relied on an independent audit report from AIB International, had safety tests conducted on the product and required Peanut Corp to provide evidence of its safety plans.
"I think we did everything we could do," said Mackay, whose company lost nearly $70 million in products from the recall. "We were dealing with an unethical and dishonest supplier. I'm unaware how you manage for someone who is prepared to put the public at risk."
AUDIT HEADS UP
The owner of King Nut Co said his company depended on Peanut Corp to sell safe products. "I understand our name was on it, but we bought a closed container," said Martin Kanan, president of King Nut. "We have got to start with the manufacturers."
Internal documents released by lawmakers showed Peanut Corp was notified when an inspection was planned by AIB, the audit firm it hired, and and told how to prepare.
In an e-mail, Peanut Corp's auditor, Pete Hatfield, told the manager of the Georgia plant: "You lucky guy. I am your AIB auditor. So we need to get your plant set up for any audit." He later gave the Georgia plant a superior rating.
In contrast, a 2002 internal audit of Peanut Corp's Georgia plant paid for by Nestle USA found rodent droppings and dead insects and determined it was "not in compliance" with housekeeping, sanitation or pest control standards.
An audit of Peanut Corp's Texas facility in 2006 reached the same conclusion. As a result, Nestle never hired Peanut Corp as a supplier.
"Why didn't you do the same? You all talked about safety as the No. 1 concern. It seems like you passed that responsibility to someone else," said Rep. Bart Stupak, chairman of the Energy and Commerce Subcommittee on Oversight and Investigations.
The three executives all said they supported plans to require the government to certify third-party auditors and hold unannounced audits when possible. They also backed reporting results to the U.S. Food and Drug Administration.
Congress and the White House support tougher food safety regulations. Several bills have proposed giving FDA more funding and power, including mandatory recall authority and product traceability.