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Two Companies Fined $7 Million for Misbranded Pet Food Ingredients

Since the massive pet food recall of 2007, an increasing number of dog “pawrents” have been turning to all-natural, grain-free dog food brands– and are paying a premium price for the promise of higher quality.

However, pet food manufacturers and suppliers were rarely held accountable for the promises they made to consumers – until now.

An FDA Criminal Investigation

On October 11th, 2018, the United States District Court in St. Louis sentenced two pet food ingredient suppliers – Wilbur-Ellis Co. and Diversified Ingredients, Inc. – to pay more than $7 million for selling and shipping adulterated and misbranded ingredients to pet food manufacturers.

Wilbur-Ellis Company is an international marketer and distributor of agricultural and industrial products as well as animal feed used to manufacture dog and cat foods.

Diversified Ingredients, Inc. is a commodities broker, merchandiser, and distributor to many pet food manufacturers.

Earlier this year, both companies pleaded guilty to misdemeanor counts of introducing misbranded food into interstate commerce.

Charles Grinstead, Special Agent in Charge, FDA Office of Criminal Investigations’ Kansas City Field Office, stated:

“Substituting inferior ingredients in pet food is against the law, and the FDA, working with its federal and state partners, will take action as necessary to hold ingredient suppliers accountable for distributing such products.”

How It All Started

In order to follow all of the events that led up to this lawsuit, we have to go back to 2014.

On May 6th, 2014, Nestlé Purina PetCare Company filed a lawsuit against Blue Buffalo Co., Ltd. for false advertising and misleading pet owners about natural, high-quality ingredients in many of Blue Buffalo’s products.

In the lawsuit, Nestlé Purina claimed that independent laboratory testing revealed poultry by-products, corn, and artificial preservatives, contrary to the “finest natural ingredients” Blue Buffalo advertised.

Per the Association of American Feed Control Officials (AAFCO), chicken or turkey meal should have contained:

A “combination of clean flesh and skin with or without accompanying bone…exclusive of feathers, heads, feet and entrails.” [1]

Blue Buffalo then filed a lawsuit against Purina on May 14th, 2014, for “defamation, unfair competition, false advertising, and violations of trade practice statutes.[2]

In September, Blue Buffalo released a report dismissing the credibility of Nestlé Purina’s “independent lab” testing as “junk science.” The company claimed that Nestlé Purina had simply launched a smear campaign because Blue Buffalo was “a competitor whose ingredients are preferred by knowledgeable pet parents.”

Blue Buffalo Claims It Was Defrauded, Triggers a Whirlwind of Lawsuits

Subsequently, on October 14th, 2014, Blue Buffalo’s Founder and Chairman Bill Bishop announced that it had been defrauded by one of its suppliers, a Wilbur-Ellis processing plant in Texas.

Bishop wrote:

“…While [Wilbur-Ellis’] customers were ordering and paying for 100% chicken meal, at times they were receiving  shipments that contained poultry by-product meal.”

Blue Buffalo filed a suit against Wilbur-Ellis and Diversified Ingredients, Inc., the broker who sold the substituted ingredients to Blue Buffalo.

Diversified Ingredients, in turn, filed complaints against Wilbur-Ellis and Custom Ag Commodities, LLC, a wholesaler which brokered the sale of the poultry by-products between Diversified and Wilbur-Ellis, and ultimately Blue Buffalo.

Diversified alleged the two companies colluded in a cover-up to sell “cheap low-grade meal blended with beaks, feet, viscera, feathers and other by-products and sent Diversified inflated invoices and false bills of lading.” [3]

In response, Wilbur-Ellis admitted that “some mislabeling of poultry products mixed at and shipped from Wilbur-Ellis’ Rosser, Texas, plant occurred prior to May 2014.” [4]

However, it also stated that “Diversified and/or Blue Buffalo knew or should have known the composition and nature of the ingredients . . . the nature and constituents of the poultry products Wilbur-Ellis shipped were not hidden from Diversified or Blue Buffalo.”

A Class Action Lawsuit Against Blue Buffalo

Naturally, pet owners were upset by the revelation that Blue Buffalo’s premium foods actually contained poultry by-products and corn, and many of them took legal action.

Due to the numerous related actions, the United States Judicial Panel on Multi-district Litigation decided on October 17th, 2014, to consolidate the seven false advertising lawsuits[5]

On May 6th, 2015, Blue Buffalo admitted in court that a “substantial” and “material” portion of its pet food contained the mislabeled ingredients.

Then on December 10th, 2015, Blue Buffalo agreed to a settlement of $32 million for the class-action lawsuit, the largest pet food class action settlement in history.[6] However, it did not admit any wrongdoing.

Purina and Blue Buffalo Settle

After a whirlwind of claims and counterclaims, Nestlé Purina and Blue Buffalo announced on November 3rd, 2016, that they reached a “mutually agreeable settlement of the lawsuits” between them.

The announcement came more than two years after Nestlé Purina filed its lawsuit against Blue Buffalo. The terms of the settlement remain confidential. [7]

Blue Buffalo continued to pursue its legal claims against Wilbur-Ellis and Diversified Ingredients in an effort to recoup some or all of the $32 million class-action lawsuit settlement.

Blue Buffalo Ingredient Suppliers Plead Guilty

On March 6th, 2017, both Wilbur-Ellis and Henry R. Rychlik, a former feed division employee of the Texas plant, were charged with 8 criminal misdemeanor counts related to misbranding its products and introduction of adulterated food into interstate commerce.

Wilbur-Ellis Company pleaded guilty to one adulteration charge on April 25th, 2018. U.S. Magistrate Judge Nannette A. Baker sentenced Wilbur-Ellis to 3 years of probation and ordered to pay Blue Buffalo $4,549,682 in restitution. The company was also ordered to pay $964,442 for criminal forfeiture and a fine of $1,000.

Rychlik pleaded guilty in August 2018 and admitted playing a role in sending multiple adulterated shipments from 2012 to May 2014. His plea specifically mentioned two shipments in 2014 that totaled a whopping 98,000 pounds of adulterated food.

Rychlik could face up to a year in jail and a $2,000 fine.

Prosecutors charged Diversified Ingredients and Collin McAtee, a co-owner of Diversified, with four misdemeanor counts each for introducing misbranded food into interstate commerce and introducing adulterated food into interstate commerce.

Diversified Ingredients pleaded guilty on July 10th, 2018, to one misdemeanor adulteration charge and one misbranded food charge. Judge Baker sentenced Diversified Ingredients to 3 years of probation and $1.5 million in restitution, as well as $75,000 in criminal forfeiture and a fine of $2,000.

McAtee pleaded guilty in May 2018 to two counts of his offenses and admitted to helping ship adulterated food. He also admitted to forging another Wilbur-Ellis employee’s signature on forms to conceal the contents of shipments. He faces up to a year in prison.

Other Men Involved In the Case

Prosecutors charged two other men in the case.

Gregory S. McKinney, a former Texas state feed inspector, pleaded guilty on May 11th, 2018, to a federal felony of adulteration or misbranding of food.

While still employed by the Office of Texas State Chemist, McKinney formed Superior Commodities LLC, supplying falsely labeled ingredients for pet food products. He faces up to 4 years in prison.

Another Texas man, William Douglas Haning, was indicted on the charges of conspiracy and wire fraud. Haning was the co-owner of American By-Products in Rosser, Texas, which purchased raw poultry materials and processed them. Wilbur-Ellis purchased American By-Products in 2011.

From 2008 to October 2014, Haning falsified shipping documents despite multiple warnings from state officials for mislabeling the contents of his shipment. According to the indictment, Haning used a “straw” company to falsify shipping documents supplied by Diversified Ingredients. Haning pleaded not guilty to his charges. [8]

What Now?

Despite the mislabeled ingredients, the FDA stated:

“The adulterated pet food ingredients did not pose a threat to the health or safety of any animal.”

If you have any concerns about the brand of food you feed your dog, talk to your veterinarian before you make any sudden changes to your dog’s diet. You can also try reaching out to the dog food manufacturer on social media with any questions.

References

  1. https://talkspetfood.aafco.org/whatisinpetfood
  2. https://www.prnewswire.com/news-releases/blue-buffalo-sues-nestle-purina-for-false-advertising-and-unfair-trade-practices-259231581.html
  3. http://news.vin.com/apputil/image/handler.ashx?docid=6992361
  4. https://www.vin.com/apputil/image/handler.ashx?docid=6992372
  5. http://www.moed.uscourts.gov/sites/moed/files/documents/414md2562-0001.pdf
  6. https://www.bizjournals.com/stlouis/news/2015/12/11/blue-buffalo-settles-pet-food-case-for-32-million.html
  7. http://newscenter.purina.com/2016-11-03-Nestl-Purina-and-Blue-Buffalo-Announce-Settlement
  8. https://www.stltoday.com/business/local/as-federal-criminal-probe-into-adulterated-dog-food-expands-ballwin/article_c754320d-f77a-56e7-8dff-c4d6bc018552.html

About the Author

Hyo Song, MSc.

Hyo Song, MSc.

Hyo loves dogs, plain and simple! She holds a Bachelors of Science in Biology, and a Masters in Molecular Targets and Drug Discovery; as well as a degree in Music. Loves spending time with her beautiful 11-yr old Siberian Husky named Hero, has been featured in several scientific publications and is active in providing help to dogs in need.

Read More Posts By: Hyo Song, MSc.

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