The scandal at Boar's Head, an American deli meat brand name, has been unfolding for months after a deadly listeria outbreak. As Businessweek's Amanda Mull writes today, it's part of a longer tail of an industry fighting successfully against regulations. Maybe a bit too successfully, it turns out. Plus: What international MBA students are thinking about the Harris-Trump presidential race, how German retirees were stung in a shipping container fraud and why the EV and battery industries are a big draw for vets. If this email was forwarded to you, click here to sign up. There are many theories of business, but a very popular one goes something like this: Government regulation acts mostly as a restrictor plate on the speed of progress and profit, and only when industries remove that burden can the companies within them reach their full potential. Relatively few extremists want no regulation at all, but the home renovations and European vacations of innumerable lobbyists have been funded by pursuing the general belief that less is more. As with most wrongheaded-but-durable ideas, there's a kernel of truth in there somewhere; poorly reasoned or executed governance can screw things up for companies and the public alike. But any business that would prefer to do more self-governing should be careful what it wishes for. The result is often the business equivalent of stepping on a rake. This summer, Boar's Head Provisions Co. entered the recent pantheon of companies, alongside Boeing Co. and Abbott Laboratories, that could've used a little more oversight for their own good. The deli food giant spent more than a century building itself into a nationwide leader across multiple product categories only to torch its reputation over the past few months with tainted deli meat. A listeria outbreak that the Centers for Disease Control and Prevention has linked to unsanitary conditions in the company's Jarratt, Virginia, plant has killed 10 people and sickened far more, prompting multiple lawsuits and a promised congressional investigation. Boar's Head has announced it will close the affected plant, wiping out more than 200 jobs in a small town that depended on it, according to the New York Times. Boar's Head started recalling deli meat in July. Photographer: Justin Sullivan/Getty Images Boar's Head is a private company with what seems to be an intensely insular culture—a recent Forbes report found that it's not even clear who the chief executive is months into the listeria scandal—so it's difficult to know its opinions on regulation. The meat processing industry, however, has made its preferences clear. Time and again, industrial meat processors have urged federal officials to let them take more liberties and enforce more of their own safety standards, and, thanks to a federal food-safety apparatus that a 2021 ProPublica investigation described as "baffling and largely toothless," the industry has prevailed in many of those fights. In 2019, for example, the Trump administration relaxed safety standards at pork slaughterhouses to allow them to do more self-policing and speed up their lines—a policy that, when tried in pork plants for three years, led to almost twice as many violations that carry an elevated risk of disease transmission, according to the watchdog group Food & Water Watch. Department of Agriculture inspectors were present in the Boar's Head plant at the center of the outbreak, and they documented numerous red flags, including the repeated presence of bugs, mold and mildew, according to documents first obtained by CBS News. Even so, there's no evidence that any enforcement actions were taken by the agency to make Boar's Head address those issues, and internal documents released by the USDA show that the company regarded listeria outbreaks as "low risk." The company also lacked written standards on how frequently employees should do things like change soiled aprons and gloves. The investigation into what, exactly, went wrong at Boar's Head is ongoing, but quite a few of the problems described so far are what happen when companies of many types cut corners. It's the kind of short-term thinking that you can do when you're not afraid of the feds swooping in—such as cutting costs on supplies, sanitation and experienced labor until the guardrails are so low that the whole operation eventually careens into a ditch, taking innocent members of the public with it. What happens to these companies next—lawsuits, fines, settlements, loss of public trust—is almost always far, far more expensive than it would've been to run a marginally safer operation to begin with. Regulate now, or pay later. |
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