Tort Damages Not the Only Exposure from Food-Borne Illness Outbreaks
For lawyers and insurance adjustors, compartmentalizing food-borne illness claims is easy. They often see their jobs solely as minimizing the tort liability and legal fees. In my experience, attorneys and adjustors often fail to appreciate how outbreaks can affect a client’s (or even a whole industry’s) business going forward. Often, the long-term business losses of a food-borne illness outbreak, recall, or government alert are not insured.
There is no better example of how a nationally reported food-borne illness outbreak can affect an entire industry (or even an entire category of food products) than the 2006 E. coli spinach outbreak. Two new studies published by the Agriculture & Applied Economics Association (AAEA) in its Choices magazine analyze consumer information and studies in the wake of the spinach outbreak.
Among the highlights from the first study, “Public Response to Large-Scale Produce Contamination” by Carra Cuite and William K. Hallman, were findings that Americans were more aware of advisories beginning than ending. For example, 87% of spinach consumers knew about the outbreak, but more than six weeks after the FDA had lifted its spinach warnings “almost half (45%) of people who were aware of the spinach recall were not confident that the recall had ended.”
A second study entitled “E. coli Outbreaks Affect Demand for Salad Vegetables” was authored by Faysal Fahs, Ron C. Mittelhammer, and Jill J. McCluskey. It examines the cumulative effects that sequential outbreaks can have on consumer demand and concludes that “the empirical results suggest that the subsequent outbreaks had a greater impact on the consumption of salad vegetables than the first.”
For food companies the lesson is this:
A lawyer’s role in responding to a food product crisis is important. But the roles of others, such as public relations experts, may be as important or more important in preserving the business. Make sure your lawyer (and your insurer) understands that the world may not revolve around simply resolving the tort claims as economically as possible.
Irradiation as a Part of Food Safety Reform?
In the wake of the latest Salmonella recall, Congress is holding well-publicized food safety hearings, and food safety may be rising on the priority list of the Obama administration. One question that arises is whether the perceived crisis in food safety will lead lawmakers and the public to revisit the option of food irradiation. The New York Times recently ran a nice piece on the topic. The article begins:
Before the recent revelation that peanut butter could kill people, even before the spinach scare of three summers ago, the nation’s food industry made a proposal. It asked the government for permission to destroy germs in many processed foods by zapping them with radiation.
That was about nine years ago, in the twilight of the Clinton administration. The government has taken limited action since.
The article quotes Suresh Pillai, director of the National Center for Electron Beam Research at Texas A&M University, as saying “It’s unnecessary for people to be getting sick today with pathogens in spinach or pathogens in peanut butter.” He describes the potential for irradiation of food as “humongous” and says that “[w]e have the technologies to prevent this kind of illness.”
As discussed previously on this blog, irradiation has wide support in the food industry and even has the support of plaintiffs’ lawyers such as Bill Marler, who has written a lengthy three-part series on the topic.
The question may not be whether irradiation is another tool that can prevent food-borne illness, but rather why is irradiation not being used on a wide-scale. Mr. Pillai likened fears of irradiation to “early phobias about the pasteurization of milk.” Aside from lengthy delays in FDA approval, consumer fear may be the problem. The only solutions may lie in (1) a joint effort between industry and lawmakers to educate the public on the benefits and safety of food irradiation, and (2) action by Congress and the FDA to help provide industry with the resources and political cover to begin using irradiation on a wide scale.
Some In The Plaintiffs' Bar Favor Irradiation
As previously discussed on this blog, the FDA recently approved irradiation for iceberg lettuce and spinach. We pointed out that "irradiation may provide an added level of protection from food-borne illnesses such as salmonella and E. coli. When used in combination with other state-of-the-art food handling practices, irradiation should dramatically reduce the chances of transmitting food-borne illnesses to consumers."
Now, it appears that at least some in the plaintiffs' community agree that irradiation of fresh produce may be a good thing. Bill Marler, one of the leading plaintiffs' attorneys in the food liability area, is running a series of in-depth pieces on his blog on irradiation.
Mr. Marler's conclusion in part II of his series echoes what we've posted in this blog :"In summary, food irradiation is not a 'silver bullet' for food safety. However, the increasing problem of illnesses and deaths associated with consumption of fresh produce, including lettuce and spinach, emphasizes the need for an intervention."
Irradiation - Evaluating the Investment
With a fair amount of fanfare , last week the FDA approved irradiation of iceburg lettuce and spinach. For restaurant owners, the question is whether they should invest in this process.
Like pasteurization, irradiation may provide an added level of protection from food-borne illnesses such as salmonella and E. coli. When used in combination with other state-of-the-art food handling practices, irradiation should dramatically reduce the chances of transmitting food-borne illnesses to consumers.
The FDA estimates that irradiated fruits and vegetables will cost two to three cents more per pound than nonirradiated products. Irradiation does not substitute for any other food safety practices or investments. Indeed, without added precautions against cross-contamination or field-to-fork regulation of the supply chain, irradiation provides little benefit.
Perhaps more significant than cost is the question of consumer acceptance. The good news is that the FDA does not require labeling of irradiated foods by restaurants (as it currently does for supermarket products). Yet some organic foods advocates are passionate about what they believe to be harmful effects of irradiation and are already lobbying restaurants and consumers to steer clear of irradiated foods.
At this point, arguments against irradiated foods are similar to those against pasteurization and appear to be grounded more in emotion than in science. In weighing issues of consumer acceptance and lowered risk to human health, businesses should understand that unlike economics and politics, in food safety, perception is not reality. Failure to irradiate will likely result in more personal injury claims and a significant threat to the business and the brand.
