A voluntary recall and four-month shutdown of Dole’s Springfield plant cost the company more that $25 million last year, according to documents obtained by the Springfield News-Sun.
The recall and shutdown were mentioned several times in a lengthy filing with the U.S. Securities and Exchange Commission for an initial public offering for Dole.
The Springfield distribution center has since reopened. The listeria outbreak, and resulting lawsuits, were discussed as potential risk factors as part of the filing. The U.S. Department of Justice is also conducting an ongoing investigation into the outbreak, according to information from the company.
“Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image,” Dole says in the filing. “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. ”
Dole representatives declined to comment on the filing this week.
The U.S. Food and Drug Administration is working with the Justice Department as part of the investigation. Officials with the FDA said no updates are available in the case and didn’t provide further details. Justice Department officials didn’t respond to requests for comment.
In its filing, Dole also touted its food safety practices and says it continuously looks for ways to strengthen its food safety and agricultural practices.
“We routinely evaluate processing innovations and have installed proprietary produce wash technology in each of our salad manufacturing plants,” the filing says. “We have also implemented a sanitation program which leverages the most recent advancements in cleaning chemistry, an industry-leading program for environmental surveillance and the latest technology for trending environmental testing results within a produce processing environment.”
Dole voluntarily recalled pre-packaged salads and closed the Springfield plant in January 2016 after an investigation linked the site to a suspected outbreak of listeria. Dole says in its SEC filing that it’s received notice of several claims of illnesses and two deaths potentially relating to the outbreak.
Federal investigators became aware of the outbreak using PulseNet, a network used to monitor food poisoning cases. They eventually tied the outbreak to 22 packaged salad products under the Dole brand, as well as several store brands for Kroger, Aldi, Meijer and Wal-Mart. Dole stopped production and voluntarily recalled the affected products.
The Springfield News-Sun recently reported Dole has reached tentative settlements in two separate civil lawsuits related to the outbreak, although the terms of those agreements weren’t disclosed. The two cases involved one woman from Warren County and a separate woman from Franklin County.
Dole denied the allegations in both cases, court records show.
Dole’s filing states the company is also defending against cases in Indiana, Michigan and Ontario, Canada. Each of the pending cases are in the early stages, according to information from the company.
“We are in the process of responding to the DOJ subpoena,” the SEC filing says. “In the opinion of management, after consultation with legal counsel, the claims or actions related to the packaged salads recall are not expected to have a material adverse effect, individually or in the aggregate, on our financial position or results of operations because the probable loss is not material.”
Dole’s revenues shrank slightly in 2016, which the company attributed in part to the shutting down of operations in Springfield. Overall documents filed by the company show revenue dipped to about $4.5 billion last year compared to $4.6 billion in 2015. The company also cited factors like lower volumes of strawberries, which also led to lower revenue last year.
“Packaged salad revenues decreased by $85.6 million mainly due to the four month temporary plant shutdown and related decrease in production capacity in the Springfield, Ohio, facility,” company documents say. “Our fresh-packed vegetables operations also experienced $42.7 million in lower pricing across all major product lines.
The U.S. Centers for Disease Control and Prevention released a report last fall that said the case was the first time a listeriosis outbreak was tied to leafy vegetables. That contributed to the length of time it took investigators to identify the source of the listeriosis outbreak, federal officials said.
Staying with the story
The Springfield News-Sun has provided award-winning coverage of an investigation into an outbreak of listeriosis that has been linked to salad mixes packaged at Dole’s facility in Springfield, including digging into the plant’s inspection records.
By the numbers:
$25.5M — Dole’s costs from Springfield recall
25 percent — Dole’s estimated North American retail market share of packaged salads
136 million — boxes of Dole-sourced bananas sold in 2016
1,600 acres — Property Dole owns in California, Florida, North Carolina, Arizona and Ohio