According to a Bloomberg report, over 100 companies, including Kellogg Company., The Kroger Co., and Unilever plc expect to post losses as a result of the Peanut Company of America debacle.  Although it is not specified in the article, I presume these are mainly public companies who have statutory obligations to post information about their expected losses.  A CNN report suggests, however, that the real cost may be far greater. 

What CNN’s story indicates is that even though there is no evidence to suggest that there is anything wrong with peanuts, peanut butter or peanut butter-based products sourced from anywhere other than PCA’s facility, consumers are becoming extra cautious and in many cases avoiding peanut butter altogether.  It quotes Dr. Douglas Powell, an associate professor at Kansas State University and the creator of the International Food Safety Network as well as the less formal but more memorably named Barfblog.  Dr. Powell sympathized with the consumers who aren’t buying peanut butter.

If you’re a parent packing a lunch and you have all the hectic things going on in the morning, is it really realistic to say, hey, before you put that peanut snack cracker individually wrapped item into your kid’s lunch, you’re going to go onto the Internet and check a Web site? I think that’s a bit much. I think it’s prudent to avoid this stuff until we see where this is going. 

I expressed similar sentiments in a recent blog entry, so I am not disagreeing with Dr. Powell.  Certainly, no one should eat, or give to anyone else to eat, anything that about which they have reason to be concerned as to its safety. 

The question is:  what should responsible people be saying?  The CNN report quotes from spokespeople for ConAgra Foods, the makers of Peter Pan peanut butter, and J.M. Smucker, the makers of Jif peanut butter, in each case describing how their peanut butter products do not and have not used products from PCA.  As USA Today reports that PCA’s Plainview, Texas plant is shut down after inspectors found salmonella there, and amidst reports we have already blogged about indicating that PCA’s actions were exactly the sort that lead to criminal prosecutions, what is the responsible course for dealing with this crisis? 

The 100 public companies Bloomberg referred are, I would ask you to remember, the mere tip of the iceberg.  Peanut butter products are sold at every mom and pop grocery store, every convenience store, nearly anywhere that sells food.  Kellogg’s, I dare say, can absorb its losses.  In these days when thousands are losing their jobs daily where there is no highly-publicized recall adding to the current economic woes, how many more will be thrown out of work because of lost sales of peanut butter products that are not subject to suspicion? 

In subsequent entries, we will be exploring some of the legal consequences of product recalls, as affected buyers try to recover their losses up the distribution chain.