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Menu Foods Expands Pet-Food Recall; CFO Dumped Stock

Apr 11, 2007 | NewsInferno.com

Canadian pet-food manufacturer Menu Foods has once again expanded its recall of contaminated products after discovering that at least one shipment of tainted wheat gluten made it to its Canadian production facility. In addition, it appears that Menu Foods’ CFO dumped half of his holdings in the company a mere three weeks before they announced the recall.

Last month, Menu Foods recalled more than 60 million cans and pouches of “wet” dog and cat food after the food was linked to kidney failure in a number of pets, but that recall extended only to “cuts and gravy” style dog and cat food manufactured at the company’s Emporia, Kansas, facility between December 3, 2006, and March 6, 2007. However, the company announced yesterday that a shipment of tainted wheat gluten, supplied by ChemNutra, was received at its Streetsville, Ontario, plant and used in the production of pet food in December and January.

Brands of cat food included in the expanded recall are Americas Choice, Preferred Pet, Your Pet, Pet Pride, Laura Lynn, Nutriplan, Price Chopper, Publix, Stop & Shop Companion, Winn Dixie, and Nutro Products. In addition, Royal Canin Canada has recalled its Medi-Cal Feline Dissolution Formula canned diet, available only from veterinarians in Canada. The recall now extends to at least 100 brands of pet food.

Meanwhile, insider-trading reports indicate that Menu’s chief financial officer, Mark Wiens, sold roughly half of his stake in the company on February 26 and 27. Wiens told the Toronto Globe and Mail that the stock sale was a “horrible coincidence” and that he didn’t find out about the tainted wheat gluten until at least a week later. However, records show that Menu Foods first learned about a possible safety issue on February 20 after three cat owners reported that their pets were sickened after eating Menu products. Since two of those cats were outdoor cats that may have had access to antifreeze, which can damage kidneys, the company did not aggressively pursue safety measures at that time. (The stock’s value has fallen 40 percent since Wiens’ trades.)

On March 2, Menu Foods was again warned about cats becoming ill, this time by a company who runs pet-food taste tests. Four days later, the company ceased its use of ChemNutra’s wheat gluten, which was originally imported from China. On March 12, Menu Foods was told that nine cats died after eating Menu food during product trials. Still, it wasn’t until March 16 nearly a month after initial reports of a problem came in that Menu Foods announced its recall. Soon after, the FDA identified melamine, a chemical used as fertilizer and in the production of plastics, as the contaminating agent in the wheat gluten.

Questions continue to emerge about the timeliness of Menu Foods’ response to the crisis. To that end, Congress is set to hold hearings this week to find about more about both Menu Foods’ actions and the FDA’s investigation. Also at issue is the number of pet deaths associated with the contaminated wheat gluten. The FDA has only confirmed 16 deaths so far (one dog, 15 cats), but unofficial estimates put that number significantly higher, perhaps well more than 1,000.


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