Dole’s Springfield shutdown, recalls cost company $36 million

Dole’s Springfield shutdown, recalls cost company $36 million

Dole Food Co.Because the Dole Food Company is going public, financial documents it has filed with the Securities and Exchange Commission are available showing how much recalls and shutdowns have cost the company’s  Dole Fresh Vegetables unit during the past two years.

A 2015 recall of bagged salads distributed in 13 states because a sample of Dole Spinach salad yielded a positive result for Salmonella in a random sample test conducted by the Michigan’s ag department ended up costing Dole $10.8 million.

Then in early 2016, a deadly Listeria outbreak forced Dole Fresh Vegetables to shutdown its Springfield, OH, salad processing facility for almost four months while it also managed a large product recall. The plant closure and recalls ended up costing Dole $25,5 million.

Those extra Dole Fresh Vegetables costs contained in the SEC filings were first reported by the Springfield News Sun. Dole also reports its 2016 revenue of $4.5 billion was down from $4.6 billion in 2015.

Dole Food Co. has been a private company since 2013, controlled by 94-year-old David H. Murdock, a Los Angeles billionaire. Murdock is now planning to take the company public again, which is why the recall and shutdown information was spelled out in the SEC documents.

The timing of Dole’s SEC disclosures is interesting in that the company remains a potential target of a Department of Justice investigation into the deadly listeria outbreak. In the SEC filings, Dole reports it is “in the process of responding” to a DOJ subpoena.

In keeping with its policies DOJ has remained tight lipped about the probe, which also involves FDA.

Dole reported the listeria outbreak and resulting lawsuits are potential risks for the company.

“Even if a product liability claim is unsuccessful or it not fully pursued, the negative publicity surround any assertion that our products caused illnesses or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image,” Dole’s SEC filing says.

“Moreover, claims and liabilities of this sort might not be covered by our insurance or by any rights of indemnity  or contribution that we may have against others.”

The financial filings go on to say that Dole has installed “proprietary produce wash technology in each of our salad manufacturing plants” and that it has implemented a sanitation program which “leverages the most recent advancements in cleaning chemistry.” Dole says it has gone with an “industry-leading” program for environmental surveillance and the “latest technology “for trending environmental test results within a produce processing environment.”

The 2016 listeria outbreak was associated with one death in the U.S. and up to three in Canada.  There were 19 confirmed cases in the U.S. and 14 in Canada that were associated with the outbreak.

According to the federal Centers for Disease Control and Prevention in Atlanta, the 2016 outbreak was the first time listeriosis was traced to leafy greens.

Swab tests performed by Dole inside the Springfield facility tested positive for listeria up to nine times beginning in July 2014, according to FDA inspection reports. It continued to produce and ship bagged salads from the facility.

 

(To sign up for a free subscription to Food Safety News, click here.)

2
Like
Save