'Quiet' Recall of Snacks Reveals Israel's Faulty Food Safety Laws

Facing a lawsuit, manufacturer Golden Heart and distributor Guri assert they had no obligation to inform consumers or retailers when problems were detected in two baby food products.

The baby food you purchased at a leading supermarket chain was manufactured by a well-known firm? If you think that guarantees that it is fit for consumption, don’t be so sure.

Guri A.A.O., one of the country’s largest distributors of consumer products, and baby food manufacturer Golden Heart, failed to notify customers that two snack foods for babies, Biscuitaminim and Etzba’onim, which they sell through food retailers and drug stores were apparently spoiled. That was despite complaints about possible harm to a seven-month-old girl who had eaten one of the Biscuitaminim products. Nor was the Health Ministry informed of the problem so that it could spread the word via the media, as it customarily does.

The two snacks were branded as healthy foods for children from age six months and up, enriched with iron and vitamins and minerals and Omega 3. The products are placed on baby-product shelves and sell for more than 10 shekels ($2.60) a package. Biscuitaminim and Ezba’onim have a 26% market share in their product category with over 6 million shekels in annual sales.

Senior executives at some food and drug store chains have acknowledged getting phone calls or faxes from Guri asking that the products be removed from the shelves, but customers who had already purchased the items were not informed of any problem. Other retailers said they never received notice of a product recall.

An executive at one major food retailer said his chain received notice from Guri of what he called a “quiet” recall. “They asked us to remove the product from the shelves quietly, under the radar of the media. Many times companies will contact us and ask that a product be removed from the shelves,” said the executive, who asked not to be identified.

The conversation provides a disturbing glimpse at how some food manufacturers and retailers deal with faulty products.

In the case of the seven-month-old baby, the infant’s mother filed an amended complaint in court about two weeks ago, seeking to have the case certified as a class action suit for more than 14 million shekels. The mother said that in early February her daughter threw up, suffered diarrhea and was taken to a hospital emergency room after eating a Biscuitaminim snack purchased at a Tiv-Ta’am supermarket in Be’er Sheva. Initially Tiv-Ta’am was made a party to the claim, but when the mother’s lawyers became convinced that the retailer was unaware of the defect in the product, it was dropped from the case.

The suit alleges that the mother detected a foul odor from the product even though its expiration date was still four months away. She said she called the customer service number for Golden Heart, whose other baby foods include Tivonim, Ktamtminim, the Kal Sivim food supplement and food and drink bottles for babies.

According to a transcript of the conversation submitted to the court, the customer service representative had already been aware of the problem, but tried to blame the retailer.

“Yes, we know about this,” the representative is quoted as saying. “Tiv-Ta’am should have removed it from the shelf.”

The representative attributed the foul odor of the product to its having sat in the sun, spoiling the food oil ingredient by oxidizing it. On the other hand, the representative signaled that it wasn’t an isolated incident involving mishandling by the retailer. “We have provided all the documentation to all of the retail chains to have the product removed. We have recalled the product.”

Guri and Golden Heart contend that they have not violated the law in the case of the Biscuitaminim class action suit or in the matter involving the Etzba’onim. “After a number of complaints about a persistent odor in the Biscuitaminim with product expiration date of June 1, 2015 and June 17, 2015, we decided to voluntarily remove the product from the shelves. In the case of a complaint of this kind, there is no danger to public health. Health Ministry regulations allow a voluntary recall without an obligation to inform the retail chains,” the companies said in a joint statement that makes the same claims about Etzba’onim.

In another transcript of a conversation between a Golden Heart representative and the baby’s father, the representative is quoted as saying, “We don’t know why this happened. We don’t know the amount [of product] involved. We don’t know where it happened. We don’t know if it was one pallet or two. Following two complaints, we asked all of the chains to send it back . I will check into why at Tiv-Ta’am in Be’er Sheva that wasn’t done.”

Nonetheless, a number of retail chains claim they were never notified of a problem.

Guri and Golden Heart’s seemingly problematic conduct is also reflected in a February conversation between Yossi Shalev , the vice president for marketing at Tiv-Ta’am marketing, and Avi Ganot, the sales manager at Guri, one of the country’s largest marketing and distribution firms whose brands include Olivia, Harduf, Persil, Aquafresh and Sensodyne toothpastes.

A recording of the conversation was obtained by TheMarker. In the recording, Ganot is clearly heard saying that not all retailers had been notified. He responded “okay” when he was told that there was evidence that other packages of the faulty products were still on retailers’ shelves.

An investigation conducted by TheMarker found that the Biscuitaminim product was not the only foul-smelling product that Guri and Golden Heart were selling, even though they were aware of suspected problems. A large number of similar complaints about the Etzba’onim cookies manufactured by Golden Heart and distributed by Guri were posted by parents on a Facebook page. One mother claimed that the product was moldy.

The Health Ministry's response to the Biscuitaminim case underscores the problems involved with the handling of faulty products in general and food products in particular, as well as the absence of legally mandated procedures and reporting requirements.

“The manufacturer and distributor did not advise the food service at the ministry. We are clarifying [the matter] with the manufacturer and distributor regarding this inappropriate conduct,” the ministry told TheMarker.

As a practical matter, between the lines, the ministry is acknowledging the problematic situation that exists in Israel where there is no legal obligation to report voluntary recalls by the manufacturer or distributor. This is despite a food health directive barring the sale of food of defective quality.

Recall regulations governing how the media are to be informed and what needs to be included in such a notice relate to automobiles and medical equipment. For consumer items such as food, toys, or electronic items, compliance is voluntary. An article in TheMarker last month detailed many instances where companies failed to announce recalls or failed to clarify what the problems and risks were.

The last time in which a so-called quiet recall was uncovered was in 2009, when the Central Bottling Company, the Coca-Cola franchisee in Israel, collected Coca Cola and Diet Coke bottles with particular expiry dates from retailers, but didn’t notify the media, retailers or the Health Ministry.

After Central Bottling’s conduct was reported by TheMarker, the company reported that some of the bottles had traces of benzene and sulfur that did not pose a health hazard, but the recall was later expanded to include Sprite and Diet Kinley. Nonetheless, it is not at all clear whether there have been other similar unreported instances involving companies that simply have not been caught by the media.

Such cases underline the importance of a clause in the Kulanu party’s coalition agreement with Likud in the new government that calls for a national food authority responsible for defective food products. It would replace 15 entities that now oversee the manufacturing and sale of food.

Since the agencies are not interested in ceding some of their authority, funding and power, a number of products are overseen by several agencies simultaneously, creating needless expenses and bureaucracy for many products while others go unregulated. The problem is particularly felt when there is a serious defect that no particular agency will take responsibility for, such as the Remedia baby formula affair a decade ago that resulted in the deaths of several infants, or the silicone found in Tnuva long-life milk.