International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015

Ethical Dilemma- CASE of Maple Leaf – Listeria Outbreak

Sonam Sood; Guriqmaan Singh & Gurpreet Kaur

Abstract contaminated meat products. There This report represents the ethical were about 220 possibly contaminated problem faced by Maple leaf foods due products from Barter road plant were to outbreak in 2008 which recalled. caused 22 deaths. Listeriosis is rare but Product recall was challenging for maple very dangerous infection caused by leaf foods as the distribution of the bacteria naming listeria monocytogenes. contaminated had spread The accumulation of bacteria within nationwide to different outlets as meat slicing equipment at a Toronto McDonalds and supermarket delis. maple leaf food plant lead to ’s These led to Maple Leaf foods worst ever listeriosis outbreak. It caused temporarily closing its meat processing many ethical and legal questions on the plant in Toronto and conduct training potential of Maple leaf foods. This report session for employees n on Listeria and also presents the challenges faced by on cleanliness, about 320 employees Michael McCain (CEO Maple Leaf Food) had attended the training session. due to food crisis at Maple Leaf Foods. The key stakeholders of the Maple foods The ethical problem faced by Maple leaf issue were-Public, Customers, foods when 22 people died and there Suppliers, Competition, Shareholders, were 57 total confirmed cases due to Media, Canadian Government and the Listeria outbreak. The outbreak occurred CEO Michael McCain. Public and in Barter road plant in Toronto when Consumers were mostly affected since Canadian Food Inspection Agency had they were at the risk of food fault. found listeria in some products of maple Shareholders faced decline in sales and leaf foods. Maple leaf foods issued profit. Media had played a important role nationwide recall of packaged

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015 in making people aware about the aggregate 6% employment in Canada listeria outbreak. and more or less 4.5% of GDP. Maple leaf foods made major changes (statistics Canada, 2013) to its organization and operating structure after the occurrence. The The US is Canada's major export disaster affected maple leaf foods much market with over 61.7% of exports in the and Maple leaf faced financially brake food industry. The main reason behind as well. They were recovering to retain this is the use of latest and advance their market share and image. technology Adoption of advanced Lastly there are some of the technologies has been extensive in the recommendations which Maple Leaf industry, approx 80% reporting the food should follow for the improvement adoption of at least one type of latest like appointment of safety officer, technology. (Food, 2010) providing all the updates to public, strict safety standard and regular washing The biggest food transforming industry, and cleaning of equipments etc. measured by shipments and quality included, in Canada was meat handling.. The Industry A further 20% of aggregate food exports are represented by the seafood item industry, grain and oil seed processing Food industry is one of Canada's is at the Second position with 10% biggest manufacturing sectors and is aggregate food exports , followed by likewise has vital share of Canada's products of the soil handling (8.8%). agriculture, especially in specific (Food Weekly News, , 2013) regions. In 1995, Canada's food industry utilized 184,000 individuals, In recent years, a chain of representing 10% of aggregate interconnected improvements have manufacturing sector business and changed meat industry by-products from quality included. It's Canada's third- a raw material with value into a waste biggest manufacturing industry. The product that requires disposal, at an and food sector provide

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015 increased cost. Other Items made from Maple Leaf is the second largest miller-flour the meat as animal feeds are now made in Canada with approx 26% of the local from cheaper grains. (Seaman, 2001) market share. It also introduced hot dogs, sliced meats and hams made with natural The meat industry in Canada has grown ingredients, all under its brand naming considerably in past few years and has Schneider’s. always been among Canada's most regulated industries. Canadian Food Maple Leaf Foods has 458,800 common Inspection Agency (CFIA) has laid rules shares of Bread. Maple leaf has a good past for food safety and inspection. Which ethical record. It has 13 board members to specified the weight and quality of meat ensure that the corporation. (MAPLEL EAF cuts included in the pack, the quality of FOOD, 2010) the barrels, and the amount of preservative required in the pickle. Operates in accordance with ethical and (statistic canada , 2013) moral standards. Employees of Maple leaf foods are dedicated to food safety and customer satisfaction is the main The Organization objective. Company provide training to the employees regarding the cleanliness Maple leaf food was founded in 1927 as a and other tips for food safety. Maple merger of several major Toronto meat Leaf Food has won the CANADIAN packers and Wiliam Davis Company and FAMILY FOOD AWARD which is one of became immediately Canada’s largest food their greatest achievements and proves processor. Maple Leaf Foods Inc. is a their good ethical conduct. Maple leaf prominent company also won the award for Canada’s 10 headquartered in Toronto, Most Admired Corporate Cultures and Canada. The company employs Product of the Year Canada. (MAPLE approximately 24,000 people across Canada, LEAF FOOD, 2010) the U.S.A., On August 17, 2008, one of the worst cases Europe and Asia. of food contamination in Canadian history

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015 naming listeriosis crisis was confirmed linked 2008. The company came to know to Maple leaf foods. The accumulation of slightly about the issue when four to five bacteria within meat slicing equipment at a cases came in front in month of June. Toronto maple leaf food plant lead to Then with the cases increased to eight Canada’s worst ever listeriosis outbreak which was major and before declaring (Birk-Urovitz, 2009) (agency, 2009) Occurrence Company took genetic tests Maple leaf business has three major groups of clusters of infected listeria organism. naming meat, bakery and agribusiness. Meat Government officials confirmed one Products Group includes the value-added death and 16 more cases on mid of fresh meats, chilled and ready to cook August. On August 5, 2008 sample of products and packaged meats. (MAPLE deli meats in Toronto tested positive for LEAF FOOD, 2010) listeria. Canadian Food Inspection Agency had found listeria in some The ethical issue/problem products of maple leaf foods. (P. A. Stanwick, 2012) In 2008 Canadian listeriosis outbreak Maple leaf foods issued nationwide was well-known outbreak linked to recollect of packaged infected meat Maple leaf foods which caused 22 products. More than 220 products from deaths and there were around 57 total Toronto’s Barter road plant were victims. Listeriosis a disease based on recollected since they were the source the listeria monocytogenes bacteria. of the listeria. It was proven that the Listeriosis is basically a food poisoning/ packaged products known as deli meats infection caused due to consuming food were infected with listeria which is spoiled with bacteria named monocytogenes bacterium. Maple leaf as Listeria monocytogenes. Mostly foods claimed that they had followed all Animal carries these bacteria, so meats the heath safety measures. Maple Leaf and dairy products can be affected. At temporarily closed its meat processing Maple leaf food outbreak was caused plant in Toronto and cleanup crews were due to the infected sliced meat sold by looking for cause of Listeria in Barter maple leaf foods in starting of summer road plant. (M.Lang, 2008) Available online: http://internationaljournalofresearch.org/ P a g e | 602

International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015

The grandest cerebral pain on maple This incident created negative exposure leaf food was to distinguish purchasers of maple leaf foods influencing its who had acquired their items and market share and sales. Maple leaf guarantee that they gave back their foods were willing to protect public from items. The bacterium causes affliction food poisoning without caring about the when processed yet can eventually losses they had suffered. Maple leafs bring about death for those customers were highly praised for this step. with weak resistant frameworks. The (PITTS, 2008) bacterium does not kick the bucket The cost of the handling crisis was more throughout refrigeration, which permits it than 50 million. The crisis had affected to develop rapidly in store meats. The the Maple Leaf brand much. Maple leafs side effects of listeriosis incorporate a recovered 85 percent their market share high fever, extreme cerebral pains, neck within 7 months of recall. Maple Leaf firmness and sickness and the Foods was praised for its openness, indications can consume to 90 days to positive attitude and quick response,. show up. (Liepins, 2008) (M.Lang, 2008). Despite high food norms followed by maple leaf foods they faced this crisis. Key stakeholders According to Canadian food inspection agency 36 of the cases were found in Public-Canadian consumers feared , three in British Columbia, and when news of infectivity related deaths 12 in Quebec. There were 22 deaths bust Share of Maple leaf went down and 57 serious cases of high infection because large percentage of consumers due to listeria outbreak at Maple leaf avoided Maple Foods products. People foods. Maple Leaf Foods suffered a had not started consuming Maple leaf huge loss of $50 million due to the products until they were declared safe to disaster . (Nguyen, 2008) eat. 90% of the public had information about the recall of product but the What's to come for Maple foods relied degree of information varies about the on upon treatment of this emergency. affected products. (CBC news, 2008)

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015

consumers switched to other brands. Customers- Customers were the most (marketing magzine, 2008) affected group since there were 22 Michael McCain (CEO) - McCain was deaths and 57 total confirmed cases due CEO of maple foods when listeria to Listeria outbreak. Maple foods lost outbreak occurred in 2008. McCain profit due to this serious issue among its tackled the issue in corrective manner customers. It was difficult for the brand with authority and with sympathy. He to again build the trust among the knew that the cost of recollection but customers as families suffered from the even than for the safety of other loss of lives due to the impure food. But customer he passed order to recollect all maple foods CEO had delivered apology the products and acted swiftly and by uploading videos on YouTube video. positively on the issue. He closed the Suppliers-Maple Leaf Foods sent plant, called in the purifiers, recalled letters to its distributors to stop shopping more than 200 products, apologized for the Maple Leafs products because publicly using different media, took full those products were under the responsibility himself to solve and to investigation of Canadian Food look into the matter and promised the Inspection Agency (CFIA). They were public he would do everything practically told not to distribute those products to possible to get back their trust.( customers until they were declared safe Greenberg, J., & Elliott, C. (2009) to eat by Canadian Food Inspection Agency. Media- Media played very important role during the time when this case came Competition-After 220 of products were into the knowledge. Maple Leaf's used recalled in August, all the distributors of media (television and newspaper) to maple leaf foods reported decline in inform the public about impure products sales of Maple food products. On the and information about recalled products. other hand Tyson foods the major CEO use social media and upload video competitor reported increase in sales as on YouTube. Every Canadian newspaper had headline of Maple food

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015 product recall after August 5.There was Maple leaf foods shared declined of lot of negative news related to deaths because they gave preference to public in the event and product recall. But safety and for that company recollected things changed when CEO Michael whole of the products produced in McCain apologized publically by media Toronto plant . Recalling of whole of and took full responsibility very positively products from Toronto plant caused to solve the issue. (CBC News, 2008) millions of dollars in losses. (D.Flavelle, 2008) Canadian Government- Canadian government ordered all retailers and distributors to remove affected products Aftermath from their shelves and from their menus. Government announced that all of the After the 2008 incident, company has recollected products will be tested by doubled the testing of product and also CFIA first to makes sure the quality of use the latest and innovative technology food. On September 6, 2008 the to check he food quality. The 2008 was Canadian government announced the the worst year in the history of maple independent investigation on the listeria leaf. That incident decreased the rating crisis. (Canada links Toronto plant to of company from 66 to 8 and that deadly listeriosis outbreak, 2008) incident result in a 27 million lawsuit. (Guffey, 2010) Shareholders- Shareholders experienced drop in stock prices after During the listeria outbreak of 2008, 22 recall and stock price of company fell people died and around 57 were down to $7.99 and their shares were seriously ill. This had led to recall of over down by 5.5%. By the end of October 220 products and Maple Leaf Toronto sales were down by 15 percent. The plant was shut down temporarily as a main reason behind the decreased sales shutdown measure. Maple Leafs cost of was people stopped buying Maple food the recall was approximately $50 million products. Maple leaf foods posted a which included refunds for returned third-quarter loss of C$12.9 million.

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015 products and the complete plant cleanup cleansing process under the operations. investigation of technical staff took place. To win the trust of public Compensation to victims-It was company launched blogs to interact with projected that the 5,000 people claim the public and welcome the suggestions the compensation and each would from public for future. Under the different receive a varying level of compensation blog post Maple Leaf addressed under the lawsuit. The people who questions and topics related to Listeria claimed for compensation would receive management and other food safety compensation for illness, death of a concerns. Company wanted to keep the family member and emotional stress. public in picture. (Canada NewsWire, 2009) Following compensation agreement was made- After this incident company appointed a If sufferer had died than family members safety officer. Food safety strategy in would receive $120,000 and another 2009 was launched by the company $30,000 would go to the spouse, under the guidance of Randall Huffman, $30,000 for the children of the sufferer president of the American Meat Institute and $20,000 for the parents. If the Foundation. More frequent and complainant was ill for one or two day extensive testing techniques with he/she would receive up to $780. The advanced technology adopted by the settlement was funded by Maple Leafs company. He would lead Maple Leaf's liability insurance Maple Leaf Foods food-safety and quality-assurance settled lawsuits related to listeria programs. Since he is the president of contamination for an estimated $27 American Meat Institute Foundation and million. ( canada newswire , 2008) America has best food safety policies in world. He would help Maple foods in After the incident company try to found having improvement in protocols, the cause of contamination and for that assets, and human resource strategies. company shut down the plant and deep (CanWest News, 2008)

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015

group of third-party experts to act as Company started training sessions after technical advisors. Food safety officer incident and try to educate everyone in was appointed in the company. CEO the food handling chain about the regularly interacted with the public to realities and best performs with respect keep them in picture and explain the to Listeria control – blog, videos, measures company took to fix the speeches, seminars, etc. 2009 was the issues. (PITTS, 2008) recovery year and sales slightly went up. (Jeffrey Gandz, 2011) Quantitative Analysis During the interview the president and

CEO of maple leaf Michael McCain said Maple Leaf sales were just about half “If we behave responsibly, if we put after the listeria declaration. It is consumers’ interest first and we have a evaluated that the aggregate cost of the substantial action plan that we execute review was $50 million. Sustenance over the ensuing months, and we can tainting emergency had influenced the address consumers directly, talk to them Maple Leaf mark fundamentally. China directly and explain what we have done had likewise stopped the Maple leaf and what happened within a degree of foods meat imports. Revenues of Maple openness and if we do those things, it leaf went down to $1.29 billion (2008) maybe a leap of faith, we believe we can from $1.34 billion (2007).maple leaf regain that trust.” Following action plan foods meat items sales declined by 5%, was set by McCain for Maple Foods- and working profit declined to $30 CEO took the ownership of the problem million contrasted with $94 million in and explain what happened, show 2007. The decrease was because of sympathy and regret, accept liability. item review which had cost $50 to $60 Recalled all the product from the million dollars in 2008. Maple Leaf distributors produced in the Toronto’s brands sales declined by up to 35 for Bartor road plant and closed the plant every penny after the review, which for the cleaning process and hired a prepared a huge net misfortune ($12.9

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015 million, or 10 pennies for every stake) The balance sheet of 2008 shows the for the second from last quarter and loss of $31857 ($000) and the price of wiped out 94 for every penny of the share also fell down to 11.07 from meat division's quarterly working 12.86. Share price almost fall by 32%. benefits. (D.Flavelle, 2008) (Jeffrey Gandz, 2011)

Maple foods stock price from March 2008 to March

2010

Stock price-The graph shows that stocks of moral behavior they were relied upon of Maple leaf foods were lowest when to recover their piece of the pie and the crisis was at its peak in October sales income. Besides the path in which 2008. Graph shows that Maple foods they gave this emergency was have been recovering from the crisis acclaimed by individuals. It is evident since October 2008. (Graph source from the figures that Maple foods had a :Yahoo Finance) speedy recovery from the crisis so there is no long term financial threat to them. By the end of 2009 the organization had (J.Spears, 2010) picked up back some trust from Canadians, the brand was all the while Recommendations experiencing declining sales, declining value and certainty in their items. Since  Maple foods should regularly maple foods have history of great history clean and wash the machines

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International Journal of Research p-ISSN: 2348-6848 e-ISSN: 2348-795X Available at http://internationaljournalofresearch.org/ Volume 02 Issue 02 February 2015

used during the production or for it is mandatory for the food the production from inside so that inspectors monitor and test the micro organism (bacteria) cannot food themselves instead of letting grow inside the machines and the company test the product for this help the company to provide them. The replaced system more safe food to the customers. should have provision related to  USA has set the benchmark for the surprise visit of officers for the cleansing standard. There is food testing twice or thrice in a zero tolerance for listeria in USA. year. The inspectors should have In USA companies add more freedom to investigate any preservers to the food to kill the concerns related to the health bacteria and before selling the and safety issues under the old product companies do their own system. complete testing. No ready to eat  Maple leaf food should appoint a food products without preservers food safety officer who can should sold in the Canada, Maple supervise all the food safety Leaf Foods ought to include operations. Food safety officer sodium diacetate as an additive can order health officials who test to its meat items to execute samples products. The main listeria or in any event back off its objective of Hiring of food safety development. Since Health officer will be to ensure high Canada has permitted meat- safety standards. The food officer processing organizations the should have ability to take choice of adding sodium corrective measures to improve diacetate to killed listeria from the and control the quality and food meat. safety.  Maple foods should Implement  Maple leaf should keep the public old system of Canadian food up to date by providing all the inspection agency back in which updates related to the occurrence

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not only for the brand reputation References but for the safety of public as [1] canada newswire . (2008, dec well. If people have information 28). Maple leaf foods reaches settlement agreement of class about the infected product range action lawsuits. . canada then they will not buy that product newswire.

and in this way we can save their [2] agency, c. f. (2009). listeria valuable life. Maple leaf should monocytongenes outbraek.

keep their website up to date and [3] Birk-Urovitz, E. (2009). The 2008 under the news Section Company Canadian Listeriosis Outbreak:. toronto: McMaster University. should provide the latest information to the customer. [4] Canada links Toronto plant to deadly listeriosis outbreak. (2008,  Future is uncertain and in aug 24). Retrieved from business risk is always there we cnn.com/health: http://edition.cnn.com/2008/HEAL cannot predict what the next day TH/08/24/listeria.outbreak/index.h will bring for us so Maple leaf tml?eref=onion

should always be ready to face [5] Canada NewsWire. (2009, march the challenges and the other 25). Maple leaf foods launches blog. . Canada NewsWire. uncertainties and for that company need a strong plan to [6] CanWest News. (2008, nov 05). Maple leaf hires new food safety tackle with such issues. Maple officer. . CanWest News. leaf should expand the [7] CBC news. (2008, oct). DEADLY Laboratories for testing with BACTERIA STRIKE latest and advanced technology CANADIANS. CBC News in Review .  Maple Foods should meet a regular and enforced national [8] CBC News. (2008, 0ct). DEADLY BACTERIA STRIKE standard. The existing practices CANADIANS. CBC News in should be drop and strict safety Review .

standards should be followed. [9] D.Flavelle. (2008, oct 30). Maple leaf foods profits sliced by listeria outbreak; posts fourth loss in row

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on costs of meat recall, but rate/company-info/business- shares rise as annual sales show operations/ a slight gain. . toronto: toronto star. [18] MAPLE LEAF FOOD. (2010). company information-our [10] Food Weekly News, . award and recognitions. (2013). food processing in Retrieved from maple leaf.ca: canada - PEST framework http://www.mapleleaf.ca/en/corpo analysis. . reserch and markets . rate/company-info/awards-and- recognition/ [11] Food, O. M. (2010). food and beverage. toronto. [19] MAPLEL EAF FOOD. (2010). company information. [12] (2010). Business Retrieved from mapleleaf.ca: communication process & http://www.mapleleaf.ca/en/corpo product. In M. &. Guffey. rate/company-info/

[13] J.Spears. (2010, feb 25). ). [20] marketing magzine. (2008, Maple leaf foods returns to profit; aug 25). RECALL COULD COST earnings recover from 2008 MAPLE LEAF $20 MILLION. listeria outbreak that cost $168 canada: Canadian Press. million. . Toronto Star. [21] Nguyen, L. (2008, sep 2). [14] Jeffrey Gandz. (2011). Listeriosis death toll 12; china Maple Leaf Foods: The. ivey bans import of all products from executive development . toronto: maple leaf foods. The Province. Richard Ivey School of Business. [22] P. A. Stanwick, &. S. [15] Liepins, N. B. (2008, aug (2012). The food recall crisis at 24). maple leaf meats; company maple leaf foods. The Business expands recall. CanWest News. Review, . Cambridge.

[16] M.Lang. (2008, august 29). [23] PITTS, G. (2008, nov 28). care centres still serving deli The testing of Michael McCain. meats; patients eatingproducts Globe and Mail Update. not part of maple leaf foods recall. alta hospitals . Edmonton [24] Seaman. (2001). Meat Journal. . processing by-products management trends. biocycle. [17] MAPLE LEAF FOOD. (2010). company information- [25] statistic canada . (2013, 08 business operations. Retrieved 31). canadian food inspection from mapleleaf.ca: agency. Retrieved from canada http://www.mapleleaf.ca/en/corpo .ca:

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http://www.inspection.gc.ca/food/ meat-and-poultry- products/manual-of- procedures/chapter- 4/eng/1367622697439/13676227 87568

[26] statistics Canada. (2013, 09 03). Industrial Butchers and Meat Cutters, Poultry Preparers and Rel. W. Retrieved from canada .ca: http://www.servicecanada.gc.ca/e ng/qc/job_futures/statistics/9462. shtml

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