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Beech Nut Case Study on Ethics Essay

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Beech-Nut a distributor of apple juice in the competitive baby food industry started purchasing apple juice concentrate from a supplier called Universal Juice Company in 1977. There should have been questions at that time because Universal Juice sold its product at around 25 percent below the market value for apple juice. John Lavery the vice president of operations received his first indication in 1978 that the apple juice concentrate from Universal might be adulterated but ignored the warnings from Dr. Jerome LiCari, Beech-Nuts director of research (Starr, 1989). Then in 1979, outside laboratory tests and an unsolicited report from a Swiss laboratory determined that the apple juice was adulterated (Starr, 1989). With each repeated …show more content…

The final cost to Beech-Nut for the deception and cover up was $140,000 for investigation cost to the Food and Drug Administration, $2.5 million to retailers, a $5 million cash refund for consumers and a $2.1 million fine to the Federal Government (Buder, 1988). This is a total of $9,740,000 which is a significant difference from $3.5 million. The second question addresses whether the public was harmed in any way and if foreign countries were harmed by the adulterated apple juice. My response is a resounding yes. The public, which includes the consumer, retailer and competitor, were all harmed by the deception of Beech-Nut. First, the consumers paid too much for a phony apple juice that was made from a cocktail of beet sugar, cane sugar syrup, corn syrup and water (Buder, 1988). The court agreed with this assertion by requiring Beech-Nut to pay $5 million in cash refund to consumers. Thomas Roche, the lead Government prosecutor likened the actions of Beech-Nut to “a hand reaching out from the store shelf and taking money out of the pockets of consumers (Buder, 1988). Secondly, the code of morality and ethics was violated by deceiving people about the content of the apple drink and leading people to believe the drink had the nutritional value of apple juice. Apple juice has a significant concentration of phenolics, which protects against diseases, vitamins and boron that promotes healthy bones (Parks, 2005).

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