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No warning letter in American Mercantile raid. Is this the new FDA?

4 Min Read
No warning letter in American Mercantile raid. Is  this the new FDA?

This week's search and seizure for the ingredients company American Mercantile was swift and came without so much as a warning letter. Industry experts say there is a new sheriff in town. Food safety problems with peanuts and peppers have pushed the agency into enforcement action. "The food and supplements industry can expect a lot more of this," says Loren Israelsen, executive director of the supplements trade group United Natural Products Alliance (UNPA). "This is the new FDA, so wake up everybody," he says. Israelsen says the FDA has the 3Ms — "money, mandate and manpower."

Israelsen expects this type of action to speed up by July. Now that companies have been inspected for the first time, FDA has a water mark for comparison. "It's like letting the EKG machine run for 90 seconds before measuring the health of one's heartbeat," Israelsen says. "The FDA needs a baseline."

On Thursday, May 7, US Marshals seized $1.5 million worth of ingredients from the company on the order from the US District Court in Memphis. US Marshalls acted on behalf of FDA, after two inspections revealed a lack of action on the part of American Mercantile. "During a routine inspection in March, the FDA uncovered evidence of extensive rodent and insect infestation throughout the company's warehouse. A follow-up joint inspection with the Tennessee Department of Agriculture found that the owner failed to clean the facility and did not correct previous violations, despite promising to do so. No warning letter was issued," FDA said in an e-mail statement to Functional Ingredients magazine.

Functional Ingredients discovered on Thursday that American Mercantile supplies ingredients for manufacturers in the food and dietary supplement industry and to its own two subsidiaries — a food and an equine/pet food company. The FDA would not comment on whether this incidence may lead to further investigations of Ingredients Corporation of America (ICA) and Equine Science, both based in Memphis and owned by American Mercantile. Damon Arney is president of both American Mercantile and ICA. The only statement released thus far in this regard was the fact that no illnesses or deaths have been reported in relation to American Mercantile.

The raid raises questions about compliance issues. American Mercantile's website cites the company as being certified organic and "GMP FDA and pharmaceutical complaint [sic]." The company would not confirm the latter compliance claims (GMP, FDA and pharmaceutical) after multiple inquires but according to records of the top three supplement certifiers, American Mercantile is not GMP certified with USP, NSF or the Natural Products Association.

Functional Ingredients could confirm that the company is due for renewal for organic certification with Florida-based Quality Certification Services. The last inspection was approved June 2008. In the past American Merchantile certified organic ingredients included Acer spicatum (Mountain Maple Bark), Achillea millefolium (Common Yarrow), Aletris farinosa (Whitetube Stargrass), Aralia racemosa (American Spikenard) and Ilex paraguariensis (Yerba Mate).

"If there is anything to be learned from this, it's that this is a very visible example of a system that needs improvement. Better communication is needed from FDA, third party certifiers and the National Organic Program and vice versa," says Marty Mesh, Executive Director of QCS. Mesh says had he known about this from FDA in March, his organization could have taken action with unannounced inspections to verify or resolve outstanding problems.

Given American Mercantile's vertical integration with a finished food company, the question about whether the contamination affected finished foods still lingers. Ingredients Corp. distributes branded and private label spice blends under the Memphi brand and sells the Barzi Brand dried bean soup mixes to 80 countries (see below for a list of distributors).

"Certainly the relationship between the companies raises some red flags," says Daniel Fabricant, PhD, vice president Scientific and Regulatory Affairs of Natural Products Association, but anytime a regulatory system looks only at "snapshot history" as does the current system, these types of situations and questions will arise. "Inspectors are only at the facility for one week of the year. We must have standards and enforceable procedures in place for the other 51 weeks of the year. That is the standard that the industry must work towards."

According the company website, Ingredient Corp. distributes to 80 countries and sells the Barzi Brand products, which are available online and in supermarkets, including Kroger Delta region, Kehe Food Distributing in the Midwest, Gourmet Award in the Southeast, DPI Distributing, Haddon House Foods in the East, Value Merchandisers, Millbrook Distributing and Giannini Foods in the Mid-South.

American Mercantile's website says it distributes spices, seeds, botanical extracts, essential oils, natural pigments, sweeteners and related raw materials. FDA seized sarsaparilla, spearmint, cornstarch, sweet orange peels, licorice powder, sassafras and salt in the raid.

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