Top dairy firm fined over cover-up
Atop Kiwi dairy company has been ordered to pay nearly $450,000 after a former manager directed staff to conceal positive environmental listeria results for four years.
Details of the previously suppressed criminal prosecution can now be reported after the company, as well as two of its former senior leaders, were sentenced and court papers were released to the Herald.
The Ministry for Primary Industries (MPI) charged Epicurean Dairy Limited (EDL), which trades as The Collective and markets a wide range of yoghurt products here and abroad.
The government department also prosecuted EDL’s former general manager and one of its founding directors, Angus Allan, and Ilya Pyzhanov, a former operations manager and director.
The case came after MPI discovered EDL quality staff were directly told by Pyzhanov to not report positive environmental listeria results at the company’s Avondale factory, court documents reveal.
There were some 235 unreported positive results for listeria, which equated to one positive result a week for the entirety of the offending period between 2012 and 2016.
Despite no evidence suggesting any contaminated products were on the market for public consumption or affected any foreign markets, Pyzhanov’s practice facilitated the concealment of the positive results.
EDL, which pleaded guilty to eight charges under the Animal Products Act, and Allan, who admitted two charges, were sentenced yesterday in the Waita¯kere District Court.
The company was fined $369,000 and ordered to pay $80,000 in legal costs, while Allan was fined $54,000.
Pyzhanov, who was described at the sentencing as the architect of the offending, has already been convicted and fined $60,000.
He was fired from EDL in November 2016 when EDL was placed under notice by MPI and was also removed as a director of the company and ceased to hold any shares.
As operations manager, Pyzhanov was in charge of the production and quality-control teams, which reported to him. He was also on the company’s senior leadership team and the EDL board. Because listeria is prevalent in the dairy industry, a rigorous testing and reporting regime is required under the Animal Products Act and EDL operated under a risk-management programme (RMP).
Allan, a chef with experience in business development focusing on food products, was listed as the “responsible person” of the RMP, while Pyzhanov was the “designated day-to-day” manager and responsible in Allan’s absence. As general manager, Allan — also an EDL shareholder — was responsible for several teams and was the head of the senior leadership team and a member of the EDL board.
In August 2013, after receiving several positive results for listeria during the previous year — which were not reported — some staff requested a meeting with Allan as further positive results were detected.
They sought his permission to report the positive results, which Allan agreed to, court papers read.
There are several species of listeria but only the bacterium listeria monocytogenes is considered harmful to humans. It can cause serious infection, disease, harm pregnant women, and in a vulnerable person even result in death.
A positive result for listeria monocytogenes at EDL’s factory was reported on August 9, 2013 to the company’s regular auditor Eurofins New Zealand, which is approved by
MPI to conduct diary RMP audits. EDL was told to take corrective actions, including placing product on hold.
However, from mid-2013, EDL staff under Pyzhanov’s direction had instructed the Eurofins lab to separate positive environmental listeria results from negative results and to also provide them separately.
On 32 occasions between June 20, 2013 and April 18, 2016 the quality team at EDL was supplied with certificates of analysis wherein the positive and negative results were recorded on separate certificates, court documents read.
This practice led to the concealment of the positive results.
Allan told MPI investigators he did not know the details of the process of pathogen swabbing and had no knowledge of positive results which were not being reported.
He also said he was unaware that documents were being falsified.
The court heard yesterday that an employment investigation had cleared Allan of any wrongdoing and pointed the finger at Pyzhanov.
It heard Allan remains employed at EDL but in a creative role.
Pyzhanov, however, claimed he told Allan of the positive results but was instructed not to report them.
He said he believed the positive results were mainly from the factory floor and the company should have been reporting them.
Pyzhanov said he gained quotes to replace the floor but the request to do so was denied every time. Court papers, however, show Pyzhanov’s claims are not supported by contemporaneous documentary evidence.
After MPI discovered the breaches, EDL’s processing was closed for two to three weeks from November 2016.
EDL told the Herald it accepted there would be public concern about historical misreporting of listeria results at its factory. “We want to apologise and reassure everyone that food safety is a top priority for us and that no unsafe products were ever sold to the public,” the company said.
It said there had been no nonreporting issues since August 2016.