Nestle did its own food-safety inspection at peanut plant

Foodmaker Nestlé decided against doing business with Peanut Corp. of America after its inspectors found grossly unsanitary conditions at two processing plants, and lawmakers Thursday said that other companies should also have been that vigilant.

Nestlé's auditors examined and rejected PCA plants in Georgia and Texas, both of which were involved in the largest food recall in history. Salmonella-contaminated peanut butter and peanut paste have so far sickened 691 and may have been a factor in nine deaths. More than 3,516 products were recalled.

"They (Nestlé officials) said, 'Man, these are bad practices and we're not going to use them,' " said Rep. Bart Stupak, D-Mich., who chaired the House Energy and Commerce investigations subcommittee hearing on the industry's role in the outbreak.

Other food manufacturers relied on auditors paid by PCA. "Kellogg k was sloppy," charged Rep. Henry Waxman, D-Calif. It relied on the American Institute of Baking, a Kansas-based third-party auditor that gave the Georgia plant a superior rating. Kellogg's Keebler and Austin peanut butter crackers were recalled.

Waxman also says PCA "hired the cheapest inspector they could possibly get," paying about $1,500 when tougher "gold standard" audits cost $20,000.

Kellogg's recall costs may reach $70 million, the company has said. It purchased up to $10 million in peanut products a year from PCA.

"I think we did everything we could do," David Mackay, Kellogg's chief executive, told lawmakers. He said Kellogg used common industry practices, but PCA was an "unethical, dishonest supplier" that was prepared to put people's lives at risk. Kellogg has 1,000 ingredient suppliers, he says. It will now do its own audits of those making products most vulnerable to bacterial contamination.

Nestlé's audits took place at PCA's Georgia plant in 2002 and at the Texas plant in 2006.

The 2006 audit, released by the committee, found poor pest control, the lack of an environmental monitoring program for pathogens and the potential for cross contamination.

Similar problems were found in those plants by Food and Drug Administration inspectors earlier this year.

The 2002 Nestlé audit noted deficiencies in housekeeping, pest control and the potential for microbiological cross contamination. It observed that PCA needed "a better understanding of the concept of deep cleaning."