Peanut Corporation of America#Extent

{{for|the 2009 recall|2009 Peanut Corporation of America recall}}

{{Infobox company

| name = Peanut Corporation of America

| logo = Peanut Corporation of America logo.png

| type = Private

| fate = Filed for chapter 7 bankruptcy as a result of the 2009 Peanut Corporation of America recall

| founded = 1977

| defunct = {{End date|2009|02|13}}

| hq_location_city = Lynchburg, Virginia

| hq_location_country = United States

| key_people = {{Plainlist|

Stewart Parnell (President & CEO)
David Royster (Vice President)

}}

| owner = Stewart Parnell

| industry = Peanut processing

| products = Peanut butter, peanut paste, peanut meal, whole and chopped peanuts

| revenue = $25 million

| revenue_year = 2007

| num_employees = 90

| num_employees_year = 2007

| website = [https://web.archive.org/web/20090126122237/http://peanutcorp.com/ www.peanutcorp.com]

| footnotes = {{cite web | title=Peanut Corporation of America Company Overview | url=http://www.hoovers.com/Peanut-Corporation-Of-America/--HD__rfxjcjyfx,src__dbi--/free-co-dnb_factsheet.xhtml | publisher=Hoover's, Inc| year=2009 | access-date=April 11, 2009}}

}}

Peanut Corporation of America (PCA) was a peanut-processing business which is now defunct as a result of one of the most massive and lethal food-borne contamination events in U.S. history.{{Cite web |date=September 21, 2015 |title=Office of Public Affairs {{!}} Former Peanut Company President Receives Largest Criminal Sentence in Food Safety Case; Two Others also Sentenced for Their Roles in Salmonella-Tainted Peanut Product Outbreak {{!}} United States Department of Justice |url=https://www.justice.gov/opa/pr/former-peanut-company-president-receives-largest-criminal-sentence-food-safety-case-two |access-date=July 27, 2023 |website=www.justice.gov |language=en}}

PCA was founded in 1977 and initially run by Hugh Parnell with three sons, including Stewart Parnell. The company was sold in 1994–1995 with Hugh Parnell retiring and Stewart Parnell and others remaining with the new company as consultants. In 2000, PCA was bought back by Stewart Parnell in a private sale. PCA came to operate processing facilities in Blakely, Georgia, Suffolk, Virginia, and Plainview, Texas, providing peanut and peanut butter products{{cite web|url=https://apnews.com/article/2fc7cc42ea06485fb61f336f2733b7ff|title=Peanut salmonella trial shows food safety relies on honor system|work=Associated Press News|access-date=September 10, 2023|date=August 9, 2014}} primarily to the "institutional food" market (schools, prisons and nursing homes), to food manufacturers for use in cookies, snacks, ice cream, and dog treats, and to other markets.

By 2007, PCA had grown to 90 employees and $25 million in annual sales. It has been estimated to have been manufacturing roughly 2.5% of processed peanuts in the U.S. at that time.

PCA permanently halted its operations after it was found to be the source of a massive Salmonella outbreak in the U.S., during late 2008 and early 2009. The 2008 contamination followed a long history of food quality issues. There had been concerns about sanitation at the company since at least the mid-1980s, when the company was run by Hugh Parnell. In the years just prior to its sale and Hugh Parnell's retirement, PCA was sued: by American Candy Company in 1990, and by Zachary Confections Inc. of Frankfort, Indiana in 1991, after discovery that PCA's peanut products had exceeded the FDA tolerance level for aflatoxin, a mold-derived toxin common to peanuts. After the contamination event, investigations showed that some PCA processing was being done without FDA knowledge and oversight, and other food handling and processing areas had gone long periods without federal inspection.

In late 2008 and early 2009, as a result of the Salmonella contamination event, nine people died and at least 714 people fell ill from food poisoning after eating products containing contaminated peanuts. This contamination triggered the most extensive food recall in U.S. history up to that time, involving 46 states, more than 360 companies, and more than 3,900 different products manufactured using PCA ingredients. The contamination and recall had immediate major ramifications for the market of this set of farm products. On February 13, 2009, Peanut Corporation of America ceased all manufacturing and business operations, and filed for Chapter 7 bankruptcy liquidation. As of February 2009, a federal criminal investigation was continuing, and at least a dozen civil lawsuits had been filed. In September 2015, Stewart Parnell was sentenced to 28 years in federal prison for his role in the nationwide outbreak. Stewart's brother, Michael Parnell, was sentenced 20 years in prison.

Scope of business

Hugh Parnell Sr. founded Parnell's Peanuts, in Gorman, Texas in 1977{{cite web|url=http://www.foodqualityandsafety.com/article/blowing-the-whistle-on-wrongdoings/|title=Blowing the Whistle on Wrongdoings - Food Quality & Safety|website=foodqualityandsafety.com|access-date=July 8, 2017}} selling to consumers, bakeries and manufacturers (candy, ice cream, and snacks). The company was sold in 1994–1995, with Hugh Parnell retiring and Stewart Parnell and the others remaining as consultants. In 2000, PCA was bought back by Stewart Parnell in a private sale.{{cite news |author1=Lyndsey Layton |author2=Nick Miroff | title=The Rise And Fall of A Peanut Empire | url=https://www.washingtonpost.com/wp-dyn/content/article/2009/02/14/AR2009021401758.html?hpid=topnews | newspaper=The Washington Post | date=February 15, 2009 | access-date=April 11, 2009}} At this time, PCA operated processing facilities in Blakely, Georgia, Suffolk, Virginia, and Plainview, Texas, providing peanuts, peanut butter, peanut meal, and peanut paste to an institutional food market{{citation needed|date=December 2015}}—to schools, prisons, and nursing homes{{citation needed|date=December 2015}}—as well as to low-budget retail outlets such as dollar stores{{cite news | author=Craig Schneider | title=Peanut Corp. of America did sell to retailers | url=http://www.ajc.com/news/content/metro/stories/2009/02/09/georgia_peanut_retail.html | work=The Atlanta Journal-Constitution | date=February 9, 2009 | access-date=April 11, 2009}} and to food manufacturers for use in cookies, snacks, ice cream, and dog treats.{{Cite news |last=Silberner |first=Joanne |date=2009-01-22 |title=Peanut Recall Widens In Salmonella Outbreak |url=https://www.npr.org/2009/01/22/99763921/peanut-recall-widens-in-salmonella-outbreak |access-date=2025-06-01 |work=NPR |language=en}} PCA was estimated to have manufactured roughly 2.5% of processed peanuts in the U.S. at its height,{{cite news |author1=Chapman, Dan |author2=Newkirk, Margaret |name-list-style=amp | title=Blakely Plant Part of Firm with Humble Start | url=http://www.ajc.com/services/content/news/stories/2009/02/08/peanutcorp0208.html | work=The Atlanta Journal-Constitution | date=February 8, 2009 | access-date=April 11, 2009}} with 90 employees and $25 million in annual sales in 2007.

In 1990 the FDA found PCA was distributing peanuts with high levels of aflatoxins, caused by mold that grows in nuts and seeds. In 1992 the American Candy Company sued PCA for lost inventory that had used PCA nuts contaminated with aflatoxins. The company filed for Chapter 7 bankruptcy and permanently halted its processing and sales operations, after being found to be the source of a massive Salmonella outbreak in the United States beginning in 2008.{{cite news |author1=Kate Brumback |author2=Greg Bluestein | title=Peanut Corp. Of America Files For Bankruptcy | url=http://www.huffingtonpost.com/2009/02/13/peanut-corp-of-america-fi_n_166841.html | work=The Huffington Post | date=February 13, 2009 | access-date=April 11, 2009}}

Salmonella contamination of products

Owner

Peanut Corporation of America was founded and originally owned by Hugh Parnell, father of Stewart Parnell, but by the time of the contamination scandal had passed to Stewart as sole owner,[https://www.usatoday.com/story/money/business/2015/09/21/peanut-executive-salmonella-sentencing/72549166 Peanut executive sentenced to 28 years], USA Today, September 21, 2015. and as president and CEO of the company.[http://www.ajc.com/metro/content/metro/stories/2009/01/31/parnell_0201.html Troubled peanut firm’s chief also an industry quality adviser], The Atlanta Journal-Constitution, January 31, 2009.

Hugh Parnell started in the peanut business with Stewart Parnell and his two younger brothers in 1977; they took a struggling, $50,000-a-year peanut roasting operation and turned it into a $30 million business before selling the business in 1994–1995, after which Stewart Parnell continued on as a consultant until re-buying the Gorman, Texas, plant in 2000.{{cite journal | author = Blackledge, Brett J. & Lindsey, Sue (AP) | date = February 13, 2009 | title = Peanut plant owner becomes recluse after outbreak | url = http://www.trentonian.com/article/TT/20090213/FINANCE01/302139958 | access-date = December 12, 2015 | archive-date = December 22, 2015 | archive-url = https://web.archive.org/web/20151222092506/http://www.trentonian.com/article/TT/20090213/FINANCE01/302139958 | url-status = dead }} In 2001, he bought the Blakely, Georgia, operation, when its operations consisted only of roasting and blanching peanuts. Parnell tripled revenue at the Blakely plant by 2004, turning its first profit in 15 years, with production regularly surpassing 2.5 million pounds of peanuts per month.[https://web.archive.org/web/20071210164202/http://www.peanutcorp.com/GAmain.htm Peanut Corporation of America's Blakely, Georgia Plant], Peanut Corporation of America website, retrieved February 8, 2009. However, the FDA did not know that the plant manufactured peanut butter until the 2008-2009 outbreak.[http://www.ajc.com/feeds/content/metro/stories/2009/02/08/peanut_0208.html?cxtype=rss&cxsvc=7&cxcat=13 Food risks draw little urgency], The Atlanta Journal-Constitution, February 8, 2009.

The Parnells ran PCA on a very tight budget.{{citation needed|date=December 2015}} The company under Hugh Parnell operated a bare-bones front office and used minimum-wage labor, a style that was continued by Stewart Parnell, who ran PCA from a converted garage behind his home in an upscale suburb outside of Lynchburg, Virginia, and continued to rely on minimum-wage labor.

Despite more than 12 tests between 2007 and 2008 that showed Salmonella contamination in his company's products, Parnell wrote an email to company employees on January 12, 2009, that stated, "We have never found any salmonella at all. No salmonella has been found anywhere in our products or in our plants."[https://www.nytimes.com/2009/02/12/health/policy/12peanut.html?hp Peanut Company Sent Products Before Test Results], The New York Times, February 11, 2009. Parnell ordered products identified with Salmonella to be shipped and complained that tests discovering the contaminated food were "costing us huge $$$$$." In a June 2008 email exchange, Parnell complained to a worker after being notified that Salmonella had been found in more products. "I go thru this about once a week," he wrote. "I will hold my breath ... again."[https://web.archive.org/web/20090215200322/http://www.google.com/hostednews/ap/article/ALeqM5jeLgwCG-FEEYH8KZ7Tt45zOdSIKgD969THS80 Peanut butter outbreak prompts tighter food safety], Associated Press, February 12, 2009. After the company was identified as the source of the outbreak, Parnell pressed federal regulators to allow him to continue using peanuts from the tainted plant. He wrote that company executives "desperately at least need to turn the raw peanuts on our floor into money."

Media

In 2015, Food Republic produced and aired Food Crimes: "P.B. & Jail."{{cite web|url=https://www.youtube.com/watch?v=rzYtI9xEmyg |archive-url=https://web.archive.org/web/20160320174509/https://www.youtube.com/watch?v=rzYtI9xEmyg|archive-date=March 20, 2016 |url-status=dead|title=Food Crimes: "P.B. & Jail."|publisher=Food Republic|access-date=July 8, 2017}}

On July 3, 2017, CNBC aired an episode of American Greed: "From Peanuts to Sick Millions” [Documentary / Crime]. Season ll, Episode AG 141.{{cite web|url=https://vimeo.com/259271860|title=American Greed: "From Peanuts to Sick Millions."|publisher=CNBC|access-date=July 8, 2017}}{{cite web|url=https://www.imdb.com/title/tt7168102/?ref_=ttep_ep7|title=American Greed: "From Peanuts to Sick Millions."|publisher=IMDB|access-date=July 8, 2017}}

References

External links

[https://sc.cnbcfm.com/applications/cnbc.com/resources/editorialfiles/2017/07/03/PCA%20E-Mails.pdf Peanut Corporation of America E-Mails]
[https://web.archive.org/web/20090129133741/https://www.accessdata.fda.gov/scripts/peanutbutterrecall/index.cfm Peanut Butter Product Recalls (2009-01-29)] - FDA
[https://www.cdc.gov/salmonella/2009/peanut-butter-2008-2009.html Multistate Outbreak of Salmonella Typhimurium Infections Linked to Peanut Butter, 2008-2009 (FINAL UPDATE)] - CDC
[https://www.nytimes.com/topic/organization/peanut-corporation-of-america Peanut Corporation of America]
[http://www.foodsafetynews.com/tag/peanut-corporation-of-america/ Peanut Corporation of America]
[http://www.foodsafetynews.com/tag/pca-criminal-case/ PCA criminal case]
[http://www.foodsafetynews.com/tag/pca-trial/ PCA trial]
[http://www.foodsafetynews.com/tag/pca-criminal-appeal/ PCA criminal appeal]
[http://fortune.com/tag/stewart-parnell/ Stewart Parnell | Fortune] {{Webarchive|url=https://web.archive.org/web/20150924200219/http://fortune.com/tag/stewart-parnell/ |date=September 24, 2015 }}
[https://web.archive.org/web/20071210164202/http://www.peanutcorp.com/GAmain.htm Peanut Corporation of America — Blakely, Georgia Plant] — archived from 2009.