Whole Foods Must Clean Up Its Act, FDA Says -- Update

By Jesse Newman and Heather Haddon

Whole Foods Market Inc. has until the end of June to remedy "serious violations" discovered by federal regulators during a February inspection of a Massachusetts plant that supplies ready-to-eat products across the Northeast.

In a warning letter to the company's chief executives, dated June 8, the U.S. Food and Drug Administration said Whole Foods had failed to manufacture, package and store food in ways that reduced the potential for contamination and microorganism growth.

On a long list of problems, FDA inspectors said they found foods like pesto pasta and mushroom quesadillas being prepared or stored in places where condensation was dripping from ceilings, a doorway and a fan.

It said the company kept dirty dishes near food, didn't supply hot water at some hand-washing sinks and allowed high-pressure hoses used for cleaning to spray into areas where foods like couscous and salad dressing were being prepared.

A Whole Foods spokeswoman said the company has corrected each of the issues identified in an earlier warning letter from February, and that they were surprised that these "thorough and tangible steps" weren't reflected in the June letter.

"We've been in close contact with the FDA, opened our doors to inspectors regularly since February and worked with them to address every issue brought to our attention," said Ken Meyer, the company's executive vice president of operations, in an emailed statement on Tuesday.

Prepared foods, like those made in Whole Food's Boston area plant, have become an increasing part of what grocers offer given higher profit margins and consumers' increasing desire to eat ready meals. Whole Foods has long offered prepared foods in its stores. Its new chain, geared toward younger, price-savvy shoppers, 365 by Whole Foods Market, also emphasizes in-store dining.

Last year, Whole Foods recalled batches of its curry chicken salad and classic deli pasta salad from stores along the East Coast after products tested positive for a dangerous form of listeria during a routine inspection of its Massachusetts facility. The items were sold in salad bars, chef's cases, and sandwiches and wraps prepared at Whole Foods stores.

The 70,000-square foot North Atlantic kitchen facility supplies prepared foods and other products to 74 stores across eight states, including Massachusetts, Connecticut, Maine, Rhode Island, New York and New Jersey, the company said.

The FDA, in its June letter, said the company's previous response was inadequate, adding that the company failed to mention steps it would take to supervise food processing operations and compliance going forward. It said Whole Foods also didn't provide documentation for review.

The agency cited Whole Foods for failing to keep its equipment in acceptable conditions, saying a sample it took from a machine used to chop vegetables tested positive for a non-pathogenic form of listeria. The pathogen's presence suggests conditions exist in Whole Food's plant that support the growth of dangerous forms of listeria and indicate the company's methods of cleaning and sanitation may not be up to snuff.

"Your firm should consider improving your environmental monitoring program to verify the adequacy of your cleaning and sanitation operation, " the FDA said in the letter. Listeria is a potentially deadly bacteria.

According to the FDA, Whole Foods also didn't safeguard food and plant surfaces that touch food from "contamination with chemicals, filth and extraneous materials."

Whole Foods' financial performance has been difficult recently , with its identical store sales slumping in one of the worst declines since the recession.

Its shares slid after the FDA report surfaced Tuesday, trading 2.90% down at $32.52 at close, one of the biggest one-day percentage drops the company has experienced this year.

Write to Jesse Newman at jesse.newman@wsj.com and Heather Haddon at heather.haddon@wsj.com

(END) Dow Jones Newswires

June 14, 2016 18:29 ET (22:29 GMT)

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