Nut Seller Fights FDA on Peanut Recall

March 23, 2009— -- Fed up with a New Jersey company's refusal to recall peanuts tied to the ongoing salmonella outbreak, the government issued a public alert and warned the company to comply immediately or face a government raid.

The Food and Drug Administration has warned the public not to consume "any peanuts or peanut-derived products" sold by Westco Fruit and Nuts Inc. of Irvington, N.J. Investigators have been wrestling with the company since February, but the FDA does not have the power to force a recall.

In most cases, the FDA is able to convince companies to recall products voluntarily. But Westco's owner has refused to play ball.

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In a telephone interview with ABC News, company owner Jacob Moradi insisted his products were safe and said a recall would drive him out of business.

"They are asking me to commit suicide based on presumption. They have shown no proof. We have begged them," Moradi said. "They have no proof that anyone got sick from eating whole redskin peanuts roasted in oil."

Moradi said the FDA has no evidence that the peanuts he bought from Peanut Corp. of America, the company at the center of the salmonella investigation, have made anyone sick. Moradi said he had the nuts tested at an FDA-approved lab, and "they all came back negative" for contamination.

For that reason, he is rejecting requests that he recall the products and is refusing to turn over a list of his clients.

According to the FDA, Westco received three shipments of "oil roasted salted redskin jumbo peanuts" from the Peanut Corp. of America's plant in Blakely, Ga. Federal officials have implicated that plant in a salmonella outbreak that has sickened at least 691 people in 46 states and may have killed nine people.

At the beginning of this year, PCA recalled all peanut products -- including roasted peanuts -- that had been processed at the plant over the previous two years.

A federal official said Moradi "ran away and hid" when government inspectors showed up at his plant. Moradi acknowledged hiding from FDA inspectors but said it was because they had repeatedly visited him and staked out his plant, and he was frightened.

"I was intimidated," Moradi said. "I was scared of them."

Moradi described Westco as "a tiny little business" with annual sales of a little more than $1 million.

"These people are basically doing it to cover their a**. FDA is doing this to cover their a**," he said. "For seven years, they did not do inspections [at the PCA plant in Georgia] and now at the cost of a tiny little small business they are coming, and they are forcing me and they have no proof. "

Massive Ripple Effects in Peanut Recall

The ripple effects from the scare at Peanut Corp. of America have hit at least 275 companies, which have recalled more than 3,491 products.

Perry's Ice Cream, for example, has recalled more than 170 tons of products. Perry's Vice President Diane Austin urged Congress to help her company and other small businesses hammered by this recall.

"In our ice cream products, we estimate that the cost of the peanuts or peanut paste was at most only one-tenth of the value of the food inputs that we lost," Austin said. "We do not yet have a complete accounting of the financial losses that Perry's will face as a result of the PCA recalls. It will surely be in the hundreds of thousands of dollars, if not more."

The salmonella scare has also devastated the peanut industry. The Georgia Peanut Commission's Don Koehler estimated losses stemming from sales that "have tanked" could hit $1 billion.

ABC News asked Moradi if recalling his peanuts might save even one life, would that be worth the cost to his business?

"If there was a tiny little possibility, yes," he said. "But the fact is that nobody has gotten sick eating whole peanuts."

The Centers for Disease Control and Prevention report most illnesses have been linked to cracker sandwiches made with a peanut paste manufactured at PCA's plant in Georgia. Seven people became ill after eating peanut butter that had been ground down in the store from whole peanuts, though those nuts may have come from a different PCA plant in Texas.