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A dairy company’s failure to act on information about long-standing contamination in a partner organisation’s factory led to babies displaying symptoms of salmonella within days of consuming its product. Prosecutors brought criminal charges against the dairy firm as a result of the inaction.
During the investigation, it was revealed that the contamination could have been present at the site for more than a decade before the recall took place.
This case shows how important it is to cultivate a culture where prompt reporting of issues is welcomed and acted on in good time for the safety of all stakeholders.
Background
In 2017, a number of babies who had consumed the firm’s infant formula manufactured at a particular plant fell ill with salmonella. There were 36 cases in the company’s home country and others reported in several European countries. In total, the affected product was distributed to 80 countries around the world.
The contamination was traced back to a drying tower on site, and prosecutors found that, although the company had become aware of the issue, it had not recalled the product immediately. In fact, it was a matter of weeks after the reported cases that the business eventually pulled the items from shops, totalling 12 million packets of powdered milk – the equivalent of one year’s output. They accused the company and its CEO of failing to address the problem, which could have had even greater health consequences.
What happened?
Prosecutors in the company’s home country brought charges against the organisation, including serious fraud and involuntary bodily harm. They also revealed that they had identified supply chain issues that they claim contributed to the contamination. Although the company attributed the issue to building work in the factory the previous year, bacteriologists found that the site had shown traces of the problem bacteria present dating back at least 12 years, when there was another salmonella outbreak of the exact same strain a year before the company took ownership. The company’s CEO admitted publicly that he couldn’t rule out the possibility that other babies had consumed contaminated milk in the intervening years. As a result, several hundred customers took legal action against the business, the majority of whom cited fraud by the business in their suits.
The fallout
The CEO of the business told the press that the issue would cost the company “hundreds of millions” of Euros, due to the recall, legal action and reputational damage that occurred. Authorities in the country closed down the factory for an investigation into the contamination, as well as banning the sale of products made there. They also warned the company that it would be liable for significant financial sanctions.
What could have happened differently?
Unfortunately, contamination of products can happen due to a range of factors. However, the way that a company deals with an issue of this magnitude is what denotes a healthy reporting culture. By not making any public comment or recalling a faulty product for weeks after realising the nature of the contamination, the company failed to demonstrate a commitment to compliance.
With a culture of transparency, any issue of this kind can be dealt with in good time, preventing any additional harm from taking place.
A company should create a code of ethics and conduct that sets in stone, amongst other things, its commitment to act with urgency where public health is concerned.
Another key element of a compliance culture is an internal reporting system that allows employees and other stakeholders to voice concerns over misconduct within the organisation. IntegrityLog is an online platform that allows for confidential and, if applicable, anonymous reporting. It complies with your GDPR obligations and keeps your investigation team on track to meet the deadlines required by your local whistleblowing law. Request a demo of IntegrityLog or request a 14-day free trial today.
