Feature2 – Bowser&Tabby1
Menu Foods packages pet food. It’s the largest manufacturer in North America, currently more than a billion containers per year, and specializes in products sold under other company’s labels. When you see a Safeway or Wal-Mart pet food, a PetSmart or Pet Valu, you’re looking at Menu Foods. The same is true of pet specialty shops, chichi boutiques, middle size venues, in short the full spectrum of outlets. In the world of wet pet food, if you’re looking at any package, no matter what it says, chances are it’s Menu Foods. Till recently.
Here’s what happened.
Menu Foods has three manufacturing plants in the United States and one in Canada. It has been in business for over 35 years and currently employs more than 800 workers. It manufactures pet food for hundreds of national brands and store labels and sells to retailers around the globe. We’re talking major reputation and megabucks. This isn’t a backstreet operation.
In February 2007, reports started circulating that pets were becoming sick after eating mainstream pet food, particularly the brands manufactured by Menu Foods. Some pets died. It is coincidence that the FDA’s announcement in springtime, when exposure was at its maximum, emphasized that this is a Canadian company. We are given to understand that no American company distributes tainted food. No sir. But all’s fair in love, war and commerce. A bit of nationalism goes down well in the neocon paradise.
Let’s look at some people and dates. The President and CEO of Menu Foods is Paul Henderson. He has held these positions for about three years. In June 2007, he declared that by March 7th Menu Foods was testing the wheat gluten in its products and had dropped all contaminated sources. This was before, Mr Henderson continues, the substance was identified as a possible cause of the problem.
We admire someone who finds solutions before identifying the problem. Unit holders of Menu Foods are proud. You can’t argue with success. And this company is gifted in other areas. It initiated a massive product recall in mid-March, and the CFO of Menu Foods Income Fund says it was a "horrible coincidence" that he sold nearly half his investment units less than three weeks before the recall. Mark Wiens sold 14,000 units, or 45 per cent of his stock, for $102,900 on February 26 and 27, 2007. The shares would have been worth $62,440 at post-recall prices. Well, some people have all the luck. We don’t criticize people for bad investments. Why grump when they receive a ray of sunshine?
Wiens said the first reports about pet-related illnesses connected to Menu Foods products were made in late February, but he did not hear about the issue until early March. The trouble is that the first pet illnesses and deaths appeared in the press about mid-February, not late February. J. Fortier reports in the Ottawa Business Journal that Menu Foods’ recall (91 products) “came nearly one month after the first reported deaths." But perhaps Mr Wiens had gone skiing or just didn’t put two and two together or Fortier blundered. These things happen. Nobody’s perfect. Not even journalists. So Mr Wiens sold his shares opportunely. So what? So he doesn’t read about every tabby that bites the dust. So he skips to the sports page. Big deal.
Menu Foods suspended its use of contaminated wheat gluten, says Mr Henderson, out of abundance of caution. This is sensitive and prudent corporate governance. It would help to know how many scientists were thrown into the investigation of illnesses and deaths, and when, and by whom, and exactly what their instructions were, and what they did. But we mustn’t blow hot and heavy over a fuss that’s passé. If Menu Foods stopped using contaminated product by March 7th and the first recall was March 16th, that’s only nine days for pets to get sick and die. Why make a fuss?
The problem turns out to be foreigners. Menu Foods and the press have done their best to explain this, and it’s our own fault if we can’t parse their Bulwer-Lytton prose. In report after report, we see that healthy wheat gluten was adulterated with melamine in China to give falsely high nitrogen readings. High nitrogen in pet food indicates good protein content. The trouble, anyone can see, is cheating by the Chinese. Menu Foods had switched its supplier of wheat gluten to ChemNutra Inc., and ChemNutra was deceived by a Chinese company. There we are. Simple. One only wishes – admittedly this is pedantic – that Menu Foods had informed the public loud and clear that it switched to ChemNutra because of price pressure from Loblaws, Wal-Mart and similar companies. These businesses are Menu Foods’ most valued customers. What is Menu Foods supposed to do? How can Mr Henderson prove that he’s a competent CEO? We understand the dilemma they faced. They must keep the megastores on side, which necessitates meeting their price demands. There’s no choice.
And the megastores can apply pressure to experienced businesses, because the public will fight for every penny discount even at the risk of Bowser and Tabby’s health. Apparently. Though no competent CEO will say so.
Wait a minute. The problem then is the consumer. Not just the Chinese. And if governments regulated pet food and had any testing, the problem might not have arisen, but regulations and testing cost money. Voters won’t elect people who increase taxes. Perhaps the problem is the voter, meaning us.
Let’s imagine that mom and pop read the papers and are willing to alter their ingrained shopping habits to save Bowser and Tabby’s lives. They see a New York State Food Laboratory announcement that Menu Foods brands are linked to aminopterin. Aminopterin is used as rat poison. Next, mom and pop then see a recall of 91 products. Several days later, the FDA says that it couldn’t find any rat poison, but the food was contaminated with melamine, a chemical used in fertilizer, pesticide and plastic. Canada has done nothing in all this time. But ignore our sleepy MPs. What are mom and pop to do with the information given by the media? Einstein would be mumbling in dismay. And then we discover that not all ingredients are listed on the packages.
Perhaps it’s unrealistic to fault Menu Foods when nobody else knows what’s going on. Another view is that someone who offers food to the public is responsible for its contents. Both positions have been defended in public. Welcome to the foodbiz. More pointedly, the question on the table is whether restaurants can poison with impunity if it’s an accident. Watch parliament for a statute that exonerates food manufacturers. See what the insurance companies say.
Perhaps 35 years of safe products made Menu Foods complacent. Or one lapse in 35 years proves that its systems are adequate. We know for sure that initially the recall included products manufactured between December 2006 and January 2007. The company assured vendors and the public that no dry — only canned and pouched wet food — was affected. Later, the recall extended to earlier and later dates, from November 2006 to March 2007. Shortly thereafter, additional brands, treats, and some dry foods were added. The massive scale of the pet food recall, lengthy delays in communicating, and mixed messages sent confusion rippling through the large population of pet owners. Does anyone know whether there have been two or several thousand pet deaths attributable to the food issue?
Perhaps the sensible approach is to restrict the shield of limited liability given to companies. We’ve already gone some distance towards this. Banks and insurance companies must comply with stringent requirements. All public companies must meet diverse ethical standards, though haphazardly enforced. And even company directors, those elusive twisters of the business universe, aren’t exempt from every recourse.
Assume that the direct cost of the pet food recall was about $45 million excluding lost business and cost of litigation. Menu Foods has reportedly lost a prime customer effective October and has triggered a mechanism to make takeover more difficult. Look at the graph showing the drop in the Menu Foods unit price over the last several months. The market smells blood.
The time is ripe for Menu Foods to point out that there is no pet food regulation, and that it would have followed all the rules except there aren’t any. The problem isn’t Menu Foods. They rightly explain that 35 years of safe product isn’t a coincidence. Menu Foods does its best. The problem is government. Parliament reduces the ranks of civil servants, fires scientists, attacks whistle-blowers, and spends its time on improving MPs’ pensions. Why not make health and safety a priority? Perhaps parliament’s attitude is skewed. Perhaps the problem is the elector, and much as we hate to admit it, us.
Some people feel deceived at the lack of alternatives for quality pet food in the marketplace. Until this recall, many consumers didn’t realize that one manufacturer was making, packaging and labeling so many different brands. Other than choosing a size and shape of kibble, and the colour of the bag it comes in, consumers appear to have little choice. Similar principles apply to human food.
Which brings us to secrecy. There was no reason for Menu Foods to disclose where its product came from. Quite the opposite. There was every reason and right to keep it confidential. Yet the public suffers from this lack of opportunity to make an informed choice. We’re back to parliament and its failure to provide the public with alternatives. Be it in the arena of newspapers or food or public information itself, MPs seem unconcerned with the restrictions that face us. They give as little as they can. It’s a struggle to extract anything from our representatives. We have ourselves to blame. Or do we? Whither democracy – the new frontier and subject for another article.
(by bb)
