by Marion Nestle
Mar 10 2009

How expensive are the peanut butter recalls?

Bill Marler, the lawyer whose specialty is helping clients obtain compensation for food poisonings, knows as much about food safety – or the lack thereof – as anyone I know.  He estimates the total cost of the peanut butter recalls as close to $1 billion.  This accounts for the costs of the recalls themselves ($75 million to Kellogg alone), as well as the costs of lost sales, advertising and public relations, and stock prices.  And that’s just to the companies.  Perhaps he will do another estimate for the 677 people (as of March 1) who are known to have become ill as a result.

In the meantime, the fact that Peanut Corporation of America filed for bankruptcy is unlikely to affect victims’ ability to collect damages.  Much of those costs will be covered by insurance.

I guess food companies think it’s cheaper to do things this way than to produce safe food in the first place.  That, of course, is why we need better federal oversight, and the sooner the better.

Guidance alert, just in: the FDA has issued after-the-fact advice to the industry about how to produce peanuts safely.

Update March 12: Phil Lempert, the Supermarket Guru, polled readers about the recalls.  All knew about them and most were not buying recalled products.  But 45% said they had stopped buying peanut butter, even though regular peanut butter was not involved in the recalls.

  • Sheila

    Advice from the government about how to produce a safe product is all well and good, but I suspect the companies already know how to produce safe products. I suspect these companies such as the peanut company simply produce unsafe food because it is cheaper, thus inflates their profit margins. It seems there is no shortage of information about how to produce safe foods, simply a shortage of ethical dedication to the safety of the consumer. The peanut company had been told of roaches and rodent feces by some of the employees, but did not fix the problem. The peanut company had red flag warnings of salmonella positive tests, but ignored those tests and went in search of other results. The people in charge of this company were not uninformed, they were simply unethical and greedy in their conduct, then took the selfish coward way out immediately by filing bankruptcy to shed themselves of financial liability. A nice little fact sheet about how to produce safe peanuts will not fix this problem.

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