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$11.2 Million for Peanut Butter?

To begin with a disclaimer, I truly believe that Peter Pan peanut butter is one of the must underrated peanut butters out there. There’s no denying how good it taste, it just gets lost in the new wave of brands, becoming popular for their nutty flavors (no pun intended), and overpriced packaging. If you don’t have parents that grew up on the stuff, and have preached the old fashioned label at you since you were a child, do yourself a favor and try Peter Pan peanut butter. Seriously. (*Not paid for by Peter Pan or ConAgra foods.* Seriously, they can’t even afford it at the moment…)

10 years ago I’d probably be ostracized from the consumer-journalism world for sharing that little opinion based spiel with you all because earlier this week, a decade after hundreds of Americans got sick from eating Peter Pan peanut butter contaminated with salmonella, the company that sold it made an embarrassing courtroom guilty plea and agreed to pay the largest criminal fine ever in a U.S. food safety case.

The president of the ConAgra subsidiary surrendered a guilty plea on behalf of his company Tuesday to a single misdemeanor count of shipping adulterated food. A U.S. District Court judge then approved a deal ConAgra reached with prosecutors to pay an $8 million fine plus $3.2 million in cash forfeitures. That’s a lot of peanut butter.

The plea deal concluded a lengthy criminal investigation into a nationwide salmonella outbreak blamed on tainted peanut butter that sickened at least 625 people in 47 states.

To note, the company recalled all of their peanut butter in 2007 that had been sold since 2004, but, as you may expect, by then most of it was long gone.

“Obviously they’re able to absorb an $11 million penalty much more than a smaller company,” said Bill Marler, a Seattle-based attorney who specializes in food safety cases. “But it still sends a pretty significant message.”

Disease detectives, because that apparently is in fact a job, traced the salmonella to a factory in rural Sylvester, Georgia, because apparently that is in fact a place, that produced peanut butter for ConAgra under the Peter Pan label as well as the Great Value brand sold at Walmart.

The president of ConAgra Grocery Products, Leo Knowles offered no testimony as he entered the misdemeanor plea on behalf of the Chicago-based corporation’s subsidiary.

“It made a lot of people sick,” prosecutor Graham Thorpe said as he described ConAgra’s decision to continue its distribution despite lab tests that had twice detected salmonella. “The industry has taken notice of this prosecution,” Thorpe continued.

The fine represents just one tenth of one percent of ConAgra’s current $8 billion market capitalization. The $3.2 million in forfeitures relates to the tainted products, which by federal law must be surrendered to the government. Since ConAgra dispensed with the recalled peanut butter nearly a decade ago, prosecutors asked for cash instead.

 

ConAgra said it was unaware that the peanut butter was contaminated with salmonella before it was shipped. However, the plea agreement documents noted that ConAgra knew peanut butter made in Georgia had twice tested positive for salmonella in 2004. Company officials ended up blaming moisture from a leaky roof and a malfunctioning sprinkler system for helping salmonella bacteria grow on raw peanuts. The company has since over spent $275 million on upgrades and adopted new testing procedures to screen for contaminants.

None of the criminal penalties (stated above) goes to victims. The judge noted that more than 150 people had filed paperwork seeking financial restitution, but unfortunately none could prove they were sickened by salmonella caused by eating the recalled peanut butter.

Three women made their case to the judge, testifying that they suffered severe gastrointestinal illness after eating from jars of Peter Pan in late 2006, and suffered from lingering health problems a full decade later. The judge said he was sympathetic, but awarded them no money.

“This to me is an injustice done all over again, especially after 10 years of waiting for justice,” said Mona McCombs of Bloomington, Indiana.

ABC News reports that Ms. McCombs testified that she and several relatives, including her elderly mother, became extremely sick after eating Peter Pan just before Christmas in 2006. She blames ConAgra for her mother’s death three months later, but none of them were tested while sick by a doctor for salmonella to prove it.

The judge noted that others had already received cash from ConAgra in civil settlements, which he said totaled $36 million to 6,810 people.

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