Unifine Richardson Case

Issues Identification

- Chinese honey has been tested and found positive for chloramphenicol (a "last-resort human anti-biotic for life-threatening infections) and is no longer able to be distributed in Canada until proper means for testing is established.

- Unifine has a single-source relationship with its current honey provider Harrington Honey; leaving Unifine in a vulnerable state.

- Harrington Honey's Chinese honey supply will be fully depleted by May 17, 2002 (in one month's time).

- Harrington's handling of the Chinese honey situation has been unacceptable.

- A new honey source and blend must be chosen.

- The new honey types will be far more expensive than that of the Chinese-Canadian blend, which may affect Unifine's largest customer who accounts for 80% of recent sales and uses the honey in free dipping sauces.

- On March 8, 2002, the CFIA modified the importation regulations for pre-packaged and bulk honey from Greece, China and Argentina.

- European Union imposed a ban on all animal products from China, including honey, because of concerns with China's lack of controls over veterinary drugs.

- CFIA sampling of both Greek and Chinese products had revealed adulteration of the honey with veterinary drugs.

- United States imposed an antidumping tariff on honey from both China and Argentina and needed to ensure that honey would not be diverted from these two countries to Canada for re-export to the United States.

Environmental & Root Cause Analysis

Qualitative Analysis

Unifine Richardson currently purchases approximately one million pounds of honey annually, representing 3-5% of the company's expenditures. The honey being purchased is a 50-50 blend of Chinese and Canadian honey. As of March 8, 2002 the Canadian Food Inspection Agency (CFIA) modified the importation regulations for pre-packaged and bulk honey from Greece, China and Argentina.

The CFIA reported that all Greek and Chinese honey would be inventoried for 20 days and detained pending receipt of laboratory results, this was due to lack of controls over veterinary drugs in these countries. The Argentinean honey would be tested but could be released prior to the lab results. If samples were found to be non-compliant, CFIA would determine the most appropriate action, which could include fines, marketplace removal and return of the contaminated honey to the country of origin, all at the manufacturer's expense.

According to the CFIA report and Harrington Honey in March, the CFIA did not even have a means to analyse evidence of some drugs, such as chloramphenicol. However, in April, the Canadian government developed a way to measure chloramphenicol. A honey shipment from China destined to a competitor of Harrington Honey was found with a residue greater than the legal limit of 0.001 parts per million (ppm).

When Harrington Honey, Unifine's single-source supplier was contacted in regards to this potential legal and worrisome matter, it was assured that the supply of honey for Unifine would not be affected or disrupted. It was believed that the CFIA had no means to test for evidence of such drugs as chloramphenicol, an antibiotic approved in Canada as a last resort drug treatment for life threatening bacterial infections, however, by early April the CFIA developed a way to measure chloramphenicol, which was expectedly found in the Chinese honey.