How Expensive Are the Peanut Butter Recalls?

Photo by Stirling gahdjun/Flickr CC

Bill Marler, the lawyer whose specialty is helping clients obtain compensation for food poisonings, knows as much about food safety -- or the lack thereof -- as anyone I know. He estimates the total cost of the peanut butter recalls as close to $1 billion. This accounts for the costs of the recalls themselves ($75 million to Kellogg alone), as well as the costs of lost sales, advertising and public relations, and stock prices. And that's just to the companies. Perhaps he will do another estimate for the 677 people (as of March 1) who are known to have become ill as a result.

In the meantime, the fact that Peanut Corporation of America filed for bankruptcy is unlikely to affect victims' ability to collect damages. Much of those costs will be covered by insurance.

I guess food companies think it's cheaper to do things this way than to produce safe food in the first place. That, of course, is why we need better federal oversight, and the sooner the better.

Guidance alert, just in: the FDA has issued after-the-fact advice to the industry about how to produce peanuts safely.

Update March 12: Phil Lempert, the Supermarket Guru, polled readers about the recalls. All knew about them and most were not buying recalled products. But 45% said they had stopped buying peanut butter, even though regular peanut butter was not involved in the recalls.