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JESSICA STEINBERG:
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A regulatory can of worms

The damage caused to babies by one product? s deficient production of baby formula is clearly Israel? s worst-ever public health scandal

It has been a week of recriminations, accusations and investigations revolving around Israeli baby formula importer, Remedia Ltd. The discovery that the milk substitute has lacked the vital vitamin B1, or thiamine, for the last six months, thus causing the deaths of up to three babies, and the hospitalizations of at least 10 others, has shocked the country and has already established itself as Israel’s worst-ever consumerist scandal.

As prosecutors and investigators scrutinize production processes in Germany and approval procedures in Israel, Israeli consumers will also have to take decisions. Until last week, customers placed their faith in baby formula, a product that is regulated by the government. The Remedia tragedy, however, now raises questions about Israel’s consumer product regulations, and whether a better consumer protection program could have detected the missing ingredient that may have caused the recent spate of death and illness.

“There are no magical solutions to this tragedy,” says attorney Yitzchak Kimchi, the official responsible for consumer protection at the Industry and Trade Ministry. “It creates questions and angles that we haven’t even thought of yet.”

THE REMEDIA scandal began to unfold last week, when it was discovered that two infants had died of encephalopathy, or nervous system disorders, and an unusual number of infants were being hospitalized with the illness, showing symptoms of vomiting, diarrhea, drowsiness and extreme restlessness. All the infants had been fed Remedia’s soy-based formula, Super Soya Formula, and were discovered to be suffering from a vitamin B-1 deficiency.

It wasn’t until last Friday, however, following the start of Shabbat, that the Health Ministry decided to ban the use of the soy-based formulas.

“There is no doubt that there is a clear connection between the fact that these babies had soy-based Remedia and the fact that they got sick,” Yitzhak Berlowitz, deputy director-general of the Health Ministry, told Israel Radio.

According to the Health Ministry, the lack of vitamin B-1 is noticeable almost immediately. If a body does not receive a sufficient supply of B-1 for 18 days, vomiting and spasms set in, leading to respiratory problems, unconsciousness and possible brain damage.

When the link between the Remedia product and the nervous system illness became clear, the state attorney’s office opened its official investigation. The state’s case is based on the fact that while the formula’s packaging indicates vitamin B-1 in its ingredients, it appears to have been missing from the formula for the last six months.

The first infant died in June. Humana Milchunion, the Hanover, Germany-based veteran baby food company that manufactures the formula, removed B1 from the formula in April. The assumption was that the soy-based product already contained a sufficient quantity of the vitamin.

In a statement, Karin Meissner, a spokeswoman for Humana, said the company is “very worried and has taken immediate actions” to determine what needs to be done. She said there might be other factors causing the illness, and a full investigation is needed.

But according to Remedia’s legal counsel in Israel, the German company removed the vitamin B1 component without informing the Israeli company.

Remedia executives flew to the Humana plant on Sunday and were joined by an emergency Health Ministry task force, which was sent to determine whether the company is guilty of neglect, criminal negligence or sabotage. The Health Ministry is also considering ordering the complete removal of all Remedia products from store shelves. Besides importing baby formula products, the company manufactures baby cereals locally and markets other baby products, including H. J. Heinz pureed fruit.

By Tuesday, Humana officially and dramatically assumed responsibility for the vitamin deficiency.

WHILE ONLY the soy-based baby formula is in question, Remedia controls one-third of the total NIS 350 million Israeli baby formula market, competing with ProMedico, a pharmaceutical importer that markets American-made Similac, and Materna, part of the Kibbutz Ma’abarot group.

At the same time, Remedia is controlled by food giant Heinz, which has owned a 51 percent stake in Remedia since 1999, when it purchased control of the company for $10 million. While the Pittsburgh-based company offered to help with the investigation, Heinz has made it very clear that the soy-based formula is a Remedia product, not a Heinz brand.

“We couldn’t be more concerned,” said Heinz’s Debbie Foster. “Our senior management has been in round-the-clock consultations with Remedia and we’ve dispatched senior people to Hanover to find the cause of the problem and assure that something like this never happens again.”

Baby formulas are not a key product range for Heinz, which focuses on weaning food, and is actually phasing out of the infant formulas products, all of which are made outside of the US, according to Foster. In fact, Heinz “got into the infant feeding business” because of its partnerships,“said Foster. Baby formulas require “a different focus, because it’s a different business.” Baby food accounts for about 10 percent of Heinz’s $10 billion in annual sales.

With 400 employees and an estimated $24 million in annual sales, at least 70 percent of Remedia’s sales are in infant nutrition, and the company’s cereals — made in Israel — are exported to the US, as well as Central and Eastern Europe.

For ProMedico and Materna, the Remedia crisis has meant brisk sales, but for them, too, the longer term remains fraught with uncertainty. Materna would not comment on the crisis. At ProMedico, Israeli employees are working closely with Abbott Laboratories, the Illinois-based maker of Similac, says Yehudit Libal, the company’s deputy marketing director. “This caught everyone by surprise,” she adds, “we haven’t even thought about the theoretical aspects of this.”

At the same time, the regulatory issues facing Remedia wouldn’t have the same effect on Similac, says Libal, given its status as a baby formula produced by a pharmaceutical company.

“Our standards are much different,” Libal adds. “We’ve always tried to talk about the nutritional aspects of formula that everyone is now just starting to talk about. Now everyone else needs to come up to our level.”

THERE HAS never been a product recall of this nature in Israel, nor has there ever been a death or serious illness caused by a consumer product.

When dairy giant Tnuva was found guilty in 1996 of violating the merchandising law by treating its long-life milk with silicon, the alien substance didn’t kill people — let alone babies — and the dairy cooperative had to pay only NIS 28,000 for failing to advertise the additive. The more serious problem, according to the Health Ministry, was that the company didn’t cooperate with the ministry, denying that it had added the silicon.

Four years later, in 2000, the Consumer Protection Law was changed to allow fines of around NIS 140,000, or up to 10 times that amount in extreme cases that involves exposing the public to health risks.

According to the Israel Consumer Council, the fines are not enough. Israel needs an independent body with greater clout, a system whose teeth would resemble the US Food and Drug Administration’s.

In the US, when Jack in the Box, a fast food chain, was at the center of an e. coli outbreak that resulted in several deaths, the company became the industry leader in food safety, urging stricter regulations.

“Over the long haul, the company needs to become a leader on safety issues,” explains Paul Holmes, a public relations expert in the US, referring to the Remedia situation. “That means assessing what industry standards are, and then exceeding them. It might even mean lobbying for stricter regulatory oversight of its own industry. That’s counterintuitive, but people trust government regulators more than they do corporate executives, and it’s very important for the company to restore trust.”

For now, supervision of the food industry is divided between the Health, Agriculture, and Industry and Trade ministries. Responsibility for health-related products, such as baby formulas, rests with the Health Ministry. And at present, Tamas — as the Industry and Trade Ministry is known — “does not have the tools to go and check products,” says Kimchi, of Israel’s official consumer watchdog.

But everything may change following the Remedia tragedy.

“It could be that we’ll need to do things differently,” Kimchi says. “The whole regulatory landscape is barren.”