Pundit Interviews

Pundit Letters

Perishable Pundit
P.O. Box 810425
Boca Raton FL 33481

Ph: 561-994-1118
Fax: 561-994-1610



Produce Business

Deli Business

American Food & Ag Exporter

Cheese Connoisseur

Whole Food’s London Store
Gets Consumer Analysis

Whole Foods has opened its new store in London. The 80,000 square foot store is like nothing in the U.K. in the way it combines an upscale gastronomical approach with a “save the world and my personal body” ethos, all wrapped in a trendy, social, foodservice-heavy atmosphere.

The Daily Mail ran a great piece on how British consumers react when they encounter Whole Foods. The piece is entitled “406 Cheeses? They must be off their trolley.”

A trolley is a shopping cart in the U.K., and what the Daily Mail did was ask both its own food writer, Tom Parker Bowles, a true “foodie,” and Julie Critchlow, a housewife and mother who became a minor celebrity in the U.K. when she rebelled against a “healthy food” movement in the schools in the U.K. by slipping her kids foods they were willing to eat through the school fence, to visit the new Whole Foods and report their impressions.

In addition to being a well known food columnist, Tom Parker Bowles has quite a pedigree.

He is the son of Camilla, Duchess of Cornwall (formerly Camilla Parker Bowles). HRH Prince Charles, Prince of Wales, was always his godfather and is now his stepfather. Tom’s stepbrothers are Prince William and Prince Harry of Wales.

Julie Critchlow seemed overwhelmed by both the large selection and the high prices (please note that the photos below are not of Ms. Critchlow — these photos were supplied by Whole Foods):

As a mum with two kids, I work out my weekly food budget very carefully. I go to my local Morrisons in Rotherham every Thursday and spend £80 to £100. If I was to come here I reckon my bill would go up to about £400.

It’s all very expensive, the choice is ridiculous and so overwhelming I don’t know where to start. Why do people need 20 different types of tomatoes?

My husband Christopher, who is a lorry driver, said he thought there were only two types — tinned and fresh. And I think a grape is a grape. You don’t need so many different sorts.

Don’t get me wrong. In principle, I am a great believer in choice.

You may remember me for passing burgers through the railings of Rawmarsh Community School, after Jamie Oliver said children had to eat healthy stuff and that parents who gave their kids fizzy drinks were ****holes.

How dare he? And why did the schools listen? But my kids — Rachel, who is 15, and Steven, who is 12 — didn’t like all that healthy stuff the school started to give them and refused to eat.

I wasn’t going to let them starve, so I took them what I knew they’d like. I don’t think people should have healthy eating rammed down their throats. It is supposed to be a free country and everyone should eat what they want. If people want to eat lots of chips they should. I cook every tea time and often make my own chips in the deep-fat fryer.

For a start, the layout of Whole Foods Market is all higgledy-piggledy. In Morrisons I know exactly where I am, but here they don’t, for example, take you from the bread to the cakes, which would make sense. Everything is all mixed up and all over the place.

It’s also full of organic and healthy things and I don’t believe in organic.

To me it’s the same vegetable or fruit whether it has or hasn’t had stuff sprayed on it. At the end of the day you still have to peel and cook it to make it tasty.

The price of organic carrots here is ridiculous — £1.59 for a bag that would cost me 65p in Morrisons. I know all the prices because I buy the same things every week. And as for £1.79 for a Savoy cabbage? You must be kidding!

But I do like the way the fruit and veg have been displayed. The asparagus, which we love, looks great as do the mushrooms, but I’ve never seen 12 varieties before. I usually buy mine in a plastic container with clingfilm on top for 99p.

My husband loves jalapeno peppers and pod peas, but as for the rest of the vegetables, to be honest I don’t know what more than half of them are.

We get through about two dozen eggs a week — I regularly make Steven fried-egg sandwiches for breakfast. I buy free range for £1.19 a dozen, whereas here they are £1.99.

But crikey! The loose eggs are 25p each, which is crazy, and as for the rhea eggs, at £25.99 each — rhea are like small ostriches — it would cost me £100 to feed us four.

I cannot look at the fresh fish stall. I prefer to buy my fish done and dusted and preferably frozen. We will eat salmon but only if it’s tinned.

But one of the things I really love are individual meat pies. Here they cost £3.99 each, which is plain ridiculous.

The worst things are the cheese counters. They smell so much it completely puts me off. We just have cheddar at home, but there must be hundreds of types here. Why do people need so many? And as for that Emmental, it smells like my husband’s sweaty socks. I’m interested in seeing it though.

I never believed cheese with holes really existed. I thought you only saw it in Tom And Jerry films. As for all those goat’s cheeses, you must be kidding. Who would want to eat something that smelt like a goat? The selection of wine doesn’t interest me either. I am a lager lass.

I only use herbs when they are dried and in packets and I wouldn’t buy fancy bread with fruit or vegetables in it — I can’t imagine who would — but I do like French sticks, which in Morrisons cost 40p but here are 99p.

Overall, this place is probably OK if you are a professional chef, but I don’t think it’s any good for working-class mums with kids who make family meals.

I think people will come for a nosey and, if money is no object, they might come back.

But I admit I wouldn’t mind having one of those strawberries they hand-dip in chocolate. They look fantastic, but God Almighty, at £1.80 for one, forget it!

Tom Parker Bowles was a little skeptical because his ethos is focused on locally grown and small scale, but he wound up being bowled over by Whole Foods’ focus on local product and the interaction it encourages between food, staff and consumer:

I arrived at Whole Foods Market feeling very cynical. I have a problem with the ethos of a company that started off as a hippy store — hey everyone! We care — but is now a huge public company with little to do with small farmers.

Plus there is a lot of nonsense talked about organic food as if merely calling it organic makes it OK, and if you eat it you will look like Kate Moss or be cured of cancer.

Nowadays supermarkets use it as a marketing tool, to enable them to charge huge prices. I also prefer to support small shops and farmers and prefer markets over supermarkets.

I am a simple soul at heart. I like to buy British and seasonal foods.

But as soon as I walked in the door I was very impressed. It was a great joy to see so many British producers given space and although some items are very expensive, there were some great bargains, such as the organic milk at 79p a litre.

It is clever to put fresh bread near the entrance because it gives off a nice smell. The cynic in me realized it was no accident. There were all sorts of bread, such as sour dough bread and pain au levain, at £3.99.

But I couldn’t see a plain brown or white loaf. Remarkably, within two minutes, I had caught the New Age hippy ethos and was ready to hug a dolphin and adopt a mung bean.

It is a Disneyland of food where everything is perfect. There are even tendrils that appear every seven minutes to give the vegetables a quick shower.

I wanted to find ingredients for a delicious dinner, and went straight for the Scottish beef at £15.99 per kilo. The only way to get flavour out of beef is to hang it for 14 to 40 days.

Here they hang it in-house for 21 days, which is short by my standards, but it looked good and black. The assistant behind the counter was very knowledgeable, which you wouldn’t find in most supermarkets.

Then I got diverted. Next to the beef was everything you could possibly need for a barbecue. I loved the fact that all the chicken was English. Right next to that was lardo…

Wow! They’ve even got lardo! It’s the cured back fat of pig topped with fennel that you barely find even in an Italian specialist shop. You slice it very thinly and eat as you would salami.

It is pure fat and anathema to a vegetarian, but it absolutely melts in the mouth and was a reasonable £1.99 per 100g.

I was also impressed that all the meat was rated. A five means the animals were kept in five-star accommodation, while one means intensive rearing and was therefore cheaper.

I also wanted a selection of English cheeses and found the very best you could get. There was Colston Bassett Stilton and Montgomery cheddar, Lanark Blue, Cornish Yarg and Appleby’s Cheshire.

I also spotted a display of Gruyere that had aged 18 months and is about as different from the Gruyere you buy in a supermarket as a Ferrari is to a Mini.

I don’t like goat’s cheese but I was approached by a man who offered me a hard goat’s cheese, which to my amazement I enjoyed.

You are constantly being offered food to taste by the very people who make it, so you can ask them lots of questions. It’s a brilliant idea.

Close by was an enormous spread of antipastos. It would make my wife very excited, and no doubt please any mother with a hedge-fund husband who didn’t want to cook.

I then passed the fresh-fish counter. It didn’t smell at all, which is a sign that the fish is really fresh. I prodded every variety I could reach. Had I done that in Tesco, I would have been escorted out.

Sure enough the flesh bounced straight back every time. It all looked so good I decided against the beef and plumped for John Dory at £20.99 a kilo with some langoustines at a decent £14.99 a kilo.

I was pleased to see that most of the labels said MSC, which means the fish comes from sustainable sources.

I also bought some samphire, which is like skinny asparagus and has just come into season, for £8.99.

There was a whole area for Thai food, including fresh ginger, fresh horseradish and five types of grape-sized aubergine. Do we need that? Probably not, but it looked delicious.

I spotted some wonderful fresh beetroot at the vegetable section so thought I’d make a beetroot salad. The asparagus was really good quality, too.

I also chose the fresh broad beans and peas. I was cross the peas weren’t British as they are just coming into season, but that is really nit picking.

I am also a tomato freak and was delighted to spot Tigerella tomatoes, so called because the markings make them look a bit like a tiger. Most supermarkets turn tomatoes into bland billiard balls, but not here.

For dessert I’d have tiny wild strawberries and British September elderflower ice cream, £4.29 for a punnet of 500ml.

Whole Foods Market is the opposite of the usual supermarket experience mainly because you are encouraged to touch, taste and smell. It might not be for everyone, but it is certainly a place where you can find the very best of British.

Whole Foods is not so much a supermarket as an experience. This is both its strength — it allows it to compete against everyone — and its weakness. Although Whole Foods has helped to change the way America retails and the way Americans think about food, those of its innovations that are scalable are quickly adopted by larger players that price more moderately.

So this one London store will probably be a big success. It may even lead to changes toward more variety, more foodservice and more interaction in other British stores — but it is hard to see it as a rollout across the U.K., much less the continent.

Lessons For Produce On Beef Recall

When ground beef started being recalled for E. coli 0157:H7 contamination by United Food Group, we ran a piece entitled, Another Unnecessary Beef Recall, pointing out that irradiation is approved for ground beef and that Wegmans has had great success selling irradiated ground beef.

Now that recall has been substantially expanded. It included both branded product and product private-labeled for Kroger, Stater Bros., Trader Joe’s, Fry’s and Bashas. This is a Class I recall , which the USDA explains means:

This is a health hazard situation where there is a reasonable probability that the use of the product will cause serious, adverse health consequences or death.

Now during the spinach crisis, many in the industry, including the Buyer-led Food Safety Initiative, pointed to the beef industry as a possible model for the produce industry to emulate. And we analyzed that possibility in Pundit’s Pulse Of The Industry: Beef Industry Food Safety Council’s James Bo Reagan.

Yet Bob Stovicek of the Primus Group saw the interest many in the produce trade were taking in the efforts the meat industry had made to improve safety and wrote to us with a warning, which we published under the title Pundit’s Mailbag — Beef Industry Not The Best Guide For Produce Food Safety.

Unfortunately, Bob’s assessment was that the produce industry was more difficult to obtain food safety in than the beef industry — which is why this beef recall is so troubling.

When Bill Marler, the food safety attorney who achieved fame because of his representation of plaintiffs in litigation against Jack in the Box, came to Salinas to do a presentation for the ag community, he entitled it “Put me out of business — Please.”

The title was based on a line in an Op-ed piece that Bill Marler wrote for the Denver Post back in 2002, making the same plea in regard to the meat industry.

Marler, like most food safety experts, including those at the CDC, FDA and USDA, have been under the impression that whatever the flaws in the food safety regimen for beef, very substantial progress has been made. Which is what was indicated in this press release and this government report from 2005:

For the first time, cases of E. coli O157 infections, one of the most severe foodborne diseases, are below the national Healthy People 2010 health goal. From 1996-2004, the incidence of E. coli O157 infections decreased 42 percent….

Several factors have contributed to the decline in foodborne illnesses. USDA’s Food Safety and Inspection Service implemented a series of new recommendations beginning in 2002 to combat E. coli O157 in ground beef… these improvements likely reflect industry efforts to reduce E. coli O157 in live cattle and during slaughter.

Yet now, Bill Marler is focusing on what he sees as unfinished business to make regulations on beef stricter and using his slogan “Put me out of business — Please,” he’s adding a 2007 spin back to the meat industry:

From 2002 until a few weeks ago, I believed that … E. coli illnesses, especially those tied to red meat consumption, were down — way down. A report in 2005 released by the CDC, in collaboration with the FDA and USDA, showed important declines in foodborne infections due to common bacterial pathogens in 2004. From 1996-2004, the incidence of E. coli O157:H7 infections decreased 42 percent.

Now that was, and still seems, significant. We saw the same results in our law firm. From 1993 (Jack in the Box) to 2002 (ConAgra), 95% of the cases in our office were E. coli cases tied to red meat consumption. After 2002, we saw an enormous drop in clients, and more importantly, ill people nationwide. Recalls fell to nothing. That is until six weeks ago. The last six weeks look like the late springs and summers from 1993 to 2002, when hamburger recalls and E. coli illnesses were a large part of every summer — much like vacations and baseball season. Now here is the concerning reality of 2007:

At least 13 people have been confirmed ill with E. coli O157:H7 infections after eating ground beef produced by United Food Group sold in Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming and Montana. Over 5,700,000 pounds of meat have been recalled.

Tyson Fresh Meats, Inc. recalled 40,440 pounds of ground beef products due to possible contamination with E. coli O157:H7. No illnesses yet reported.

Seven Minnesotans were confirmed as part of the E. coli O157:H7 outbreak that prompted PM Beef Holdings to recall 117,500 pounds of beef trim products that was ground and sold at Lunds and Byerly’s stores.

Twenty-seven people have been confirmed ill with E. coli O157:H7 infections in Fresno County. The Fresno County Department of Community Health inspected the “Meat Market” in Northwest Fresno, the source of the outbreak.

At least two people were confirmed ill with E. coli O157:H7 infections in Michigan after eating ground beef produced by Davis Creek Meats and Seafood of Kalamazoo, Michigan. The E. coli outbreak prompted Davis Creek Meats and Seafood to recall approximately 129,000 pounds of beef products that were distributed in Arkansas, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin.

Following reports of three Napa Valley children who became sick from hamburger patties sold at a St. Helena Little League snack shack, 100,000 pounds of hamburger (that was a year old) was recalled.

Several people were confirmed ill with E. coli O157:H7 infections in Pennsylvania after eating E. coli-contaminated meat products at Hoss’s Family Steak and Sea Restaurants, a Pennsylvania-based restaurant chain that purchased its meat from HFX, Inc., of South Claysburg, Pennsylvania. As a result of the outbreak, HFX recalled approximately 4,900 pounds of meat products.

I am not sure I know the reason for the new and ominous trend (these are the largest meat recalls in five years), but by anyone’s count these numbers are concerning. What I do know is that these recent outbreaks have all the ugly signs of another national emergency. As a nation — and that includes all federal and local government agencies as well as the private sector — we cannot let the positive trend of the past become another acceptable body count. We need to figure out why this has happened.

My suggestion — if Congress was willing to drop everything in order to investigate the deaths of a dozen cats due to contaminated pet food from China — perhaps bringing all the executives of the companies responsible for this recent rash of outbreaks, recalls and illnesses to Washington for a few days of questioning (under oath) might help us get to the bottom of this.

What does this sudden recurrence of recalls of beef due to E. coli 0157:H7 tell the produce industry? Well in a sense, it tells us that both Bruce Peterson, who has been arguing for an emphasis on traceability, and PMA and United, which have jointly endorsed mandatory federal food safety regulation, are correct.

Despite all these problems with beef, the beef industry has not collapsed. Partly this is the nature of the problem, and even consumers who know about the problem and are concerned about it may feel that with thorough cooking they have the ability to apply their own “kill step.” But it is also because of better traceback than has been available in the produce industry (though Bill Marler argues it can be much better) and, especially because the government, perhaps because it regulates the beef industry and feels the need to defend that system, has reacted with moderation to the problems.

Despite over 52 confirmed illnesses from a much wider group of sources than the spinach E. coli 0157:H7 situation, nobody is recommending consumers not eat beef or even just ground beef.

This moderation on the regulatory side also indicates that the Western Growers Association’s desire to see whatever food safety regulation is adopted reside in the USDA rather than the FDA might work, although there is no question that consumer advocates perceive USDA as a captive of the ag industry. If E. coli 0157:H7 recalls continue, one can expect many calls to get FDA more involved.

Yet the bottom line is that this beef situation is a time for produce industry executives to test their souls. Because the real issue we see here is the question of what our own bottom line is.

The solution proposed for produce — mandatory federal regulation — is, exactly, what the beef industry has and, based on the public reaction to the E. coli 0157:H7 problem on beef this year, if the goal is simply to save the industry, we have a pretty good framework to work with.

It seems like a regulatory structure for produce, similar to what exists for beef, will either increase regulatory confidence or co-opt regulators and, in any case, will lead to a much more reasonable food safety approach.

But… it won’t mean that some consumer won’t die from eating fresh produce.

With beef, to some extent, at least a cattleman could say that consumers were warned to cook the meat thoroughly and insist that restaurants do the same. Although that righteousness is mitigated by the fact that, in fact, very little labeling and promotion goes toward telling consumers to cook beef properly.

In fact the Partnership for Food Safety Education, whose membership consists of 19 associations and non-profits and whose Chairman this year is none other than PMA’s Bryan Silbermann, has a glaring gap in its membership: The egg people are there, the dairy, deli, bakery people are there, the chicken, turkey, pork and produce folks, but there is no participation from the beef industry.

This seems inexplicable, and one wonders if the beef people don’t want to spend money promoting the Partnerships’ recommendations which include:

Cook ground meat, where bacteria can spread during grinding, to at least 160°F. Information from the Centers for Disease Control and Prevention (CDC) links eating undercooked ground beef with a higher risk of illness. Remember, color is not a reliable indicator of doneness. Use a food thermometer to check the internal temperature of your burgers.

If so, such a hesitancy to promote proper cooking of beef might be shameful but it wouldn’t be surprising. After all in promoting its irradiated fresh ground beef, Wegmans showcases its Vice President of Consumer Affairs on its web site explaining a major benefit of buying irradiated fresh ground beef:

Wegmans Irradiated Fresh Ground Beef is here, only at Wegmans. And for those who remember what a good hamburger used to taste like, we are happily introducing this “cook it the way you like it” alternative to our standard ground beef line-up. In 2002, we were first in the country to introduce this product, but unfortunately the company that supplied the irradiation technology went out of business late in 2003, and left us searching high and low for a new supplier ever since. Thankfully, we have found one.

As a reminder, irradiation is an added layer of protection against a dastardly bacterium called E. coli O157H7. We know that cooking to 160 degrees also protects us from the menace, but the bad news is that those of us longing for a “rarer opportunity,” or for that matter a “medium opportunity” are out of luck, because cooking to 160 transforms what used to be a juicy, flavorful, ground beef eating experience into a long, sad, tasteless chew.

In other words, in a practical sense, the so called “kill stop” in ground beef may be overstated. We’ve put the labels of some of the recalled beef in to illustrate this story — you can see more of the labels and packaging here. Note that you don’t see any reference to the requirements for safe cooking of ground beef. If it is there at all, it is very obscure. This is probably not an accident.

It is a recognition by the beef industry that if consumers really thought about having to cook their burgers so thoroughly and check them with a thermometer, they might buy a lot less of them.

The shame is that with irradiation, there really is a practical kill step that could prevent people from getting sick or dying from E. coli 0157:H7.

Although Bill Marler’s suggestion to drag everyone implicated in the beef outbreak to D.C. is interesting, it strikes us as only likely to produce, at best, incremental improvements in food safety. All we’d get is more inspections, more rigorous oversight, etc.

Irradiation is still unapproved for food safety use on things like bagged spinach. But the beef situation should make the produce industry aware:

Even if we have a great year this year with no known outbreaks, and even if that is true next year and the year after, the beef situation points out that we could have another spinach-like situation in 5 years. Because improved Good Agricultural Practices and improved Good Manufacturing Practices are not a guaranteed solution.

It seems likely that such infrequent outbreaks, combined with industry efforts and a new regulatory structure, mean that the whole industry will not suffer in the future as it did in 2006.

If we want more, however, if to the farmers and processors and retailers, just one guy dying or getting very sick every five years is unacceptable. Even if the industry would survive, then we have to become far more aggressive advocates of irradiation. Otherwise it is not a question of whether there will be a next illness or death caused by fresh produce; it is a question of when. We have to decide if that is acceptable to us or not.

FDA Releases New Guidance
Document On Carrot/Low-Acid Juice

In the midst of the spinach crisis, the produce industry faced a second food safety crisis related to one of its fastest growing categories — refrigerated juices. Specifically, there was a recall by Wm. Bolthouse Farms of certain 100% carrot juice products due to concerns about botulism.

We ran an extensive series on the issue, going far beyond the specifics of Bolthouse and carrot juice to analyze important issues regarding the failure of retailers to maintain temperature in their refrigerated cases and the issue of labeling products for consumer safety. We even looked at home appliances and whether thermometers should be required in refrigerators.

Much of this coverage was informed by valuable input from Lou Cooperhouse, Director of Rutgers Food Innovation Center, who has now gotten back in touch to let us know that the FDA has just released a new guidance document on refrigerated carrot juice and other low-acid juices:

Given the recent botulism illnesses associated with refrigerated carrot juice, FDA believes that its existing guidance does not adequately address the risk of serious illness if carrot and other low acid juices that need refrigeration to maintain product safety are subject to severe temperature abuse. FDA is therefore modifying its earlier guidance on this issue and is issuing these recommendations for industry concerning the processing and labeling of refrigerated carrot juice and other refrigerated low-acid juices subject to the pathogen reduction provisions of the juice HACCP regulations…

The juice HACCP regulation only addressed the control of hazards that could occur in juice stored under normal and moderate abuse conditions during the product’s shelf life (21 CFR 120.24(a)). In light of the recent botulism cases, FDA believes that it is now also necessary to address the control of hazards that could occur in low acid refrigerated juice subjected to severe temperature abuse. Therefore, FDA is modifying its previous guidance on this issue.

FDA is now recommending that firms subject to the pathogen reduction provisions of the juice HACCP regulation incorporate validated control measures for all C. botulinum spores into their HACCP plans that will be applied in the processing facility and that will ensure that C. botulinum growth and toxin production will not occur should the juice, as offered for sale by the processor, be kept unrefrigerated in distribution or by consumers.

This objective could be achieved by any validated treatment method that is effective for this purpose, e.g., acidification of the juice to a pH of 4.6 or below, thermal treatment of the juice. As part of these control measures or a firm’s sanitation standard operating procedures, we recommend that firms ensure that all post processing equipment that contacts the juice, e.g., container filling equipment, is cleaned and sanitized adequately to prevent post processing contamination of the juice by C. botulinum spores from equipment surfaces. We also recommend that these include control measures to provide for the effective performance of their container closures (plastic caps, foil seals) in minimizing any risk of post process contamination of the juice by C. botulinum spores.

Furthermore, FDA recommends that firms continue to utilize a label statement such as “Keep Refrigerated,” along with implementation of the pathogen reduction control measures set forth in this guidance. Such labeling, when prominently displayed, serves as an additional precautionary measure to minimize the risk that these juices could become unsafe if post processing contamination of the juice by spores of C. botulinum should occur for any reason.

The advisory is actually rather amazing. On the one hand, it asks that the processor “…ensure that C. botulinum growth and toxin production will not occur should the juice, as offered for sale by the processor, be kept unrefrigerated in distribution or by consumers.” In other words the product should be done so that it is safe, even if unrefrigerated.

Yet, just to be safe the recommendation goes on “Furthermore, FDA recommends that firms continue to utilize a label statement such as “Keep Refrigerated” … on the juice that the FDA just said should be made safe even if unrefrigerated.

So even though the juice should be made safe as an unrefrigerated product, it should not be marketed that way.

The carrot juice/botulism situation did reveal a big problem with refrigerated carrot juice. Although safe if properly refrigerated, it was very dangerous if not properly refrigerated.

Yet the labeling on the product was unclear as to what temperature constituted proper refrigeration was and what happens if that level is not maintained. It wasn’t clear to a typical consumer that taking a bottle out of refrigeration to go on a cookout could have disastrous consequences.

So now, in a sense, the FDA’s recommendation closes the issue. Rather than urging better labels, it decided to solve the problem by asking that the juice be able to handle temperature abuse.

This tells us about the risk-adverse nature of the FDA. They simply are unable to accept any risk to consumers — which should inform the produce industry as it looks toward future regulation.

We are hesitant about the notion of the FDA suggesting that product which does not require refrigeration should carry a label saying “keep refrigerated.” This strikes us as likely to increase consumer skepticism about the need to follow labels. Honesty in labeling is certainly the best policy.

We thank Lou Cooperhouse for his enormous contribution to our discussion of this subject and for sending us this way to close our coverage of this issue… at least for now.

You can read the FDA’s new guidance for industry regarding refrigerated carrot juice and other low-acid juices right here.

Pundit’s Mailbag —
Protecting Ocean Spray’s
Attorney/Client Privileges

Our extensive coverage of the issues raised by the lawsuit between Jim and Theresa Nolan, as well as their company, The Nolan Network, with Ocean Spray included a piece entitled Ocean Spray May Have More To Lose Than Lawsuit, which concluded with a suggestion that it might behoove Ocean Spray to make public a special report it had commissioned to investigate the dispute in question:

There is a quick way that might resolve all this without a trial. When this situation started to heat up, Ocean Spray commissioned a special investigation conducted by a big-time law firm.

If Ocean Spray had retained a management consulting firm to do the investigation, the results of the report would already be public record through the lawsuit. But because Ocean Spray had a law firm write the report, it can claim attorney-client privilege and refuse to reveal the findings.

Yet, clearly, in an issue that has caused such controversy it would behoove Ocean Spray to clear its name by waiving attorney-client privilege and making public the results of the report.

It seems doubtful that growers and retailers alike, all of whom are being denied access to this document, are going to conclude that it exonerates Ocean Spray. That may be unfair but, by simply publishing the report, Ocean Spray could reassure the industry that it is being upfront about this entire matter.

Now we receive a letter from a well respected PACA attorney warning of the consequences of Ocean Spray taking the action we suggested:

In the “Pundit” of June 8, 2007, you made this comment:

“Yet, clearly, in an issue that has caused such controversy it would behoove Ocean Spray to clear its name by waiving attorney-client privilege and making public the results of the report.”

At the risk of being condemned for being too legalistic, this PACA lawyer must alert you to something. Courts take a pretty dim view of attempted selective waivers of attorney-client privilege. If Ocean Spray should do what you suggest, then it would risk waiver of its attorney-client privilege as to all communications related to this matter.

Depending on the particular state and forum, it is quite possible that the law of privilege of the relevant jurisdiction would not allow Ocean Spray to just release the communications which serve its public relations purposes while continuing to withhold other communications.

Ocean Spray may have some real problems but following your suggestions would most likely compound them. Produce industry members should think of what the consequences would be if all of their communications with their lawyers were opened up to the public.

— Craig Stokes
Craig A. Stokes
Santos Stokes, LLP

Craig is, of course, correct, and there are risks for Ocean Spray in releasing the report. Yet we would contend that Ocean Spray’s primary risk in this litigation is not to the plaintiffs. The Nolans are two people, and one may have lost his job, the other her business, as a result of Ocean Spray’s actions.

To some extent, that is the core of the lawsuit and, in a sense, what the court will determine. Yet the damages to the Nolans are discrete and limited. We see far bigger liabilities in payments likely to be demanded by Ocean Spray’s retail accounts.

If someone like Sam’s Club decides to press not only for a refund on its overpaying for cranberries but also starts to look at being compensated for the damage to its reputation caused by its not being competitively priced, and you multiply that by all the other retailers that compete with H.E.B., we suspect a liability many times what the Nolans would receive, even if they win a complete victory in court.

There is also the possibility of regulatory consequences. We’ve written before about how, to us, the logic of the case seems to imply that it was possible individual cranberry growers were getting short-changed by Ocean Spray.

First, it is alleged that Ocean Spray was providing differential prices to different customers for identical product shipped at the same time, but no mention is made of how the less expensive orders were allocated among growers. This raises all kinds of issues of favoritism that the USDA might not find acceptable as a way of treating growers.

Second, it is alleged that Ocean Spray advised C&S to resolve this dispute over preferential pricing by telling it to claim poor quality on fresh cranberries that were sold at a later date and, in all probability, were produced by different cranberry growers. If this happened, wouldn’t it, in effect, be reducing the returns of innocent cranberry growers? How can this conform to PACA regulations?

Third, the whole issue of Ocean Spray so aggressively attempting to get business from H.E. Butt and Costco raises the question of motivation. We don’t see anything in the documents in which Ocean Spray management was ever warned that without these two customers the fresh cranberries would go unsold. Indeed it seems like the fresh sales team didn’t want to do these deals. So who did? And why? We don’t know.

We do know that juice and processed product is the vast majority of Ocean Spray’s business. This raises at least the theoretical possibility that some high-up executives at Ocean Spray could have decided to use the fresh business to make a deal on processed product. If such an arrangement was entered into, the USDA could view it as a subterfuge that had the effect of reducing the returns of fresh cranberry growers. This would raise PACA problems as well.

Finally, Ocean Spray is a consumer products company with a brand to protect. The longer this trial gets dragged out, the more likely some consumer publication will find the story and highlight the human interest angle: The story, fair to Ocean Spray or not, will likely be portrayed as a lifetime employee and his wife, widely liked and respected, tossed aside when their presence became inconvenient to a big corporation.

The consumer media will pluck out the allegations of improper conduct against Ocean Spray and ask what protections employees have against businesses that want their employees to do disreputable things.

We don’t disagree with Craig, but we wonder if the smart thing to do here isn’t to settle with the Nolans to get this off the radar screen and, assuming the report exonerates Ocean Spray, share that publicly so as to help rebuild confidence.

Of course, in the background of all this is that when Ocean Spray elected to have a law firm do this investigation, its executives were surely mindful that the effect of deciding to have a law firm write the report was to keep it confidential. If the top people at Ocean Spray expected a report to completely exonerate the company and its employees, the executives could have had a business management consultant or a corporate ethics consultant write the report. Then releasing the report would not raise any issues regarding attorney/client privilege.

Many thanks to Craig for his careful reading and willingness to keep us all focused on the legal implication of the acts we take.

Mail to a Friend

© 2021 Perishable Pundit | Subscribe | Print | Search | Archives | Feedback | Info | Sponsorship | About Jim | Request Speaking Engagement | Contact Us