Food Makers in Israel Kept Tainted Products Secret

Surge in recalls this month marks a sea change in policy for an industry that sought to keep potential health problems quiet, admit executives. Now, panic is the order of the day.

Ofer Vaknin

Israeli food makers, which have been swept up in concerns about contaminated food and have issued a stunning 11 recalls in just the past two weeks, admit to keeping problems discovered in their products from the public and health authorities.

“It’s the nature of companies to do things quietly. Food companies often hope they can do a recall quietly, without attracting attention and negative coverage — and frequently succeed,” said an industry executive who asked not to be identified.

The latest company to issue a recall was Rushdi Food Industries, which said Wednesday that salmonella contamination was suspected in its Baracke and Halal brands of halvah.

“We have no evidence of salmonella in our products, but a Health Ministry inspection raised concerns about the manufacturing process for certain product lines. Given the current atmosphere, we decided to do a recall,” a company spokesman told TheMarker.

The wave of recalls in the first half of August points to the failure of Israel’s food industry to issue timely warnings about problems with its products — contamination, off-tastes, the presence of foreign materials, faulty packaging or production.

If the 11 recalls issued over the two weeks represent the real extent of the problem, it would mean the industry on average should be making about 150 announcements annually. But until public and regulatory concerns were aroused by Unilever Israel’s handling of salmonella found in its Telma Cornflakes, food recalls averaged two to three a month.

Unilever set off the worries when it failed to make public the problem in its cornflakes and certain other cereals until an expose by TheMarker. The tainted goods were warehoused for at least two weeks after the problem was discovered, but the products weren’t destroyed and one batch was delivered to a supermarket by mistake.

Before the Unilever affair, however, recalls this year were few in the food industry. In May and July they averaged three per month, there were four in February and March and two in January.

Some in the food industry blamed the surge on the August heat, which makes it easier for bacteria to spread and, in fact, five of the August recalls are due to bacterial contamination. But in the same month in 2015 and 2014, only three recalls were announced, in August 2013 nine and in August 2012 two.

“Once we would have said, ‘I suspect the product I’m selling is contaminated, but I’ll do another test and only then report it to the Health Ministry,’ said the executive, explaining the sudden rise. “Today, if I suspect a health risk, I turn to the health Ministry immediately and then do further tests.”

Regulations, in fact, don’t require companies to report contamination or other problems if the product hasn’t left the factory. Unilever wasn’t in violation of the rules because it didn’t know its cornflakes had in one case been delivered to a retailer.

But companies are now going beyond the letter of the law, for fear their sales will follow the same trajectory as Unilever’s. The company’s cereal sales plunged 60% in the wake of the salmonella scare, although no one has been reported sickened by the bacteria and the Health Ministry insists that there has been no increase in salmonella contamination.

“Everyone is scared, hysterical. The Unilever business has changed everything,” said the adviser.

“The CEO of one small food maker came to me and told me he found a minor problem in his product, which hadn’t even left the factory yet, and he didn’t know whether to report it or not. We decided we should. It’s become a byword in the food industry, ‘Don’t do a Unilever.’”

That hadn’t been the attitude before, admitted the senior executive. “You find there’s a problem with a product that’s already been delivered to the stores and you say to yourself, ‘I won’t report it to the Health Ministry because if I do that I’ll lose control over the situation,” he said.

“Maybe the Health Ministry will decide suddenly that it wants to inspect the factory that I don’t want inspected. If I report the ministry, I need to issue a public statement on the matter and that could cause branding problems, because if you’re a well-known company you’ll be all over the media. It’s better to keep everything in the family and compensate consumers as needed,” he explained.