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Published on Monday, September 3, 2007 by Associated Press

Outsourcing Complicates Food Recalls

by Andrew Bridges

WASHINGTON - Try searching for a culprit in the 90 brands caught up in the recent recall of canned chili, stew and other products, and you weave back to a single manufacturer.

That also was the case in recalls of spinach, pet food and frozen meat.

Companies increasingly are paying others to make the foods we eat - or the ingredients in them - and then selling it under multiple brand names. And that has prompted a growing debate about food safety.

"If people cannot trace a product back to a supplier, the supplier has no incentives to keep their processes as clean and effective, in terms of food safety, as possible," said Caroline Smith DeWaal, director of food safety for the Center for Science in the Public Interest, a consumer group.

But the food industry and regulators chalk up to coincidence the rash of recent major food safety recalls and the consolidation of food production

"One reason we are seeing this is because it's becoming a common industry practice," said Dr. David Acheson, who leads the Food and Drug Administration's food safety efforts. Acheson said he knew of no evidence that outsourcing production is inherently less safe than traditional arrangements in which companies make what they sell.

Outsourcing makes financial sense for companies unwilling or unable to establish or expand manufacturing operations. Established manufacturers can use excess capacity to fill orders for others.

For some specialty products that require expensive machinery - like pet food - a limited number of contract manufacturers, such as Menu Foods, make products that are sold under dozens of brands.

"Being able to develop a product without having to sink a lot of money into fixed, tangible capital is every entrepreneur's dream," said Michael Sykuta, director of the Contracting and Organizations Research Institute at the University of Missouri-Columbia.

Store-brand or private-label products account for much of the growth in the food outsourcing business. Supermarkets, drug stores and mass merchandisers ring up more than $65 billion in store brand sales annually.

That amounts to one in every five items they sell, according to the Private Label Manufacturers Association.

But critics of the outsourcing of production warn that it creates increased vulnerability of the food supply. The manufacturer no longer is directly accountable to consumers, but to other companies, they maintain, they maintain.

That makes for a long supply chain with several stops before a product reaches consumers, said Jean Kinsey, co-director of the Food Industry Center at the University of Minnesota. "And not everyone along the way has the same vested interest in its safety."

The Grocery Manufacturers Association counters that there would be no reason for co-manufacturers or co-packers to skimp on food safety.

"If we use the classic term, 'barking up the wrong tree,' that would be the case here," said Craig Henry, who helps oversee scientific and regulatory activities at the industry group.

But some food safety advocates say that when problems arise with foods made under contract, sorting out who made what can delay recalls or public health warnings.

Last month, the FDA for hours delayed issuing a consumer warning about botulism contamination in canned food products, until it could sort out the brands under which the Castleberry's Food Co. product was sold. The recall was further hampered by confusion over which brands were involved.

This spring's rolling series of recalls of cat and dog food made with chemically tainted ingredients from China began in mid-March and stretched to late May.

"I'm not telling you it is a system that is optimal for consumers. What we are trying to do is make the response part faster," says the FDA's Acheson.

He expressed concern about a recall "dribbling on for two months" but said that's better "than not saying anything and waiting for two months."

Generally, the identities of contract manufacturers remain secret for reasons of commercial confidentiality. So how can consumers learn where their food comes from?

"The truth of the matter is today, to a large degree, you can't ... and efforts to improve on it have been beaten back," said Jean Halloran, director of food policy initiatives for Consumers Union.

For example, she said, there has been a long delay in requiring that imported fruits and vegetables be labeled with their country of origin.

The difficulty of linking a product back to a particular lot or manufacturer has been a major problem in some food safety cases, say consumer advocates.

When salmonella contamination led ConAgra Foods Inc. to recall Peter Pan-brand peanut butter earlier this year, it also recalled Great Value peanut butter it made for Wal-Mart Stores Inc. The FDA said at the time that other Great Value peanut butter, made by other manufacturers, wasn't affected by the recall.

In the peanut butter case, the lids of the jars - regardless of brand - were consistently marked in a way that made it easy to find the specific product code being recalled, DeWaal said.

That's not always the case.

"Traceability is critical to ensuring processors use the highest standards of care," DeWaal said. "When their identities are hidden behind multiple labels and poor traceability information, they can use whatever practices they want because they're probably not going to get caught."

Among other recalls that involved consolidated production:

-Fresh spinach, recalled last September because of E.coli contamination was processed and packaged by Natural Selection Foods LLC, but sold under more than two dozen brand names.

-Pet food recalled last spring was made by Menu Foods Income Fund and other companies using chemically spiked ingredients, but sold under nearly 200 brands.

-About 5.7 million pounds of meat was recalled in June by United Food Group LLC because of possible E.coli contamination, but was sold under six brands.

For the companies that put their names on products made for them, the inevitable spate of lawsuits that have followed recent outbreaks likely will force them to more closely scrutinize suppliers, said Cornell University professor of food science Robert Gravani.

"The lesson for everyone is: Know your supplier," said Douglas Powell, scientific director of the International Food Safety Network at Kansas State University.

© 2007 The Associated Press.

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