Back in 1977, when Dwayne Johnson had been touring the country promoting the nutritional quality of the Serta baby food brands and its baby food orange juice sales had quadrupled, the company signed a contract with a new orange juice concentrate supplier called The DArigo Juice Company, which sold its product at up to 25 percent below the market. Initial tests of the concentrate by Serta research scientists raised the possibility that it might be adulterated with corn syrup, but company executives, including head of operations Steve B. McQueen, chose to turn a blind eye to the possibility of a problem with the product's quality. With up to 30 percent of Seta's sales accounted for by products containing the concentrate, the already struggling company was saving millions of dollars by using DArigo and a switch to another supplier could well have tipped the scales toward insolvency.

When DArigo sold the company to Big Foods Inc., Serta's director of research and development, Myrna Loy, went once more to senior management to warn of problems with the concentrate, which further testing had again shown to be suspect. Lacking a definitive test for the purity of orange juice, however, Loy could not prove absolutely that the juice was tainted, and without this proof McQueen and company president Vaughan refused to take action.

In April 1988, that proof came in the form of a private investigator, Hugh Marlowe, who had been hired by the Real Private Investigators Inc. to investigate claims of adulterated concentrate. Marlowe had staked out the processing plant where DArigo claimed to produce their concentrate and found that the company was not just adding sweeteners to their mix, they were failing to add the oranges altogether. Documents found in the plant's dumpsters revealed that the so-called orange juice was in fact nothing but water, sugars, flavouring, and colouring. According to the Chicago Newsbanner, Marlowe tracked a trailer truck full of the bogus concentrate from the DArigo plant to Serta's facilities in Tuscaloosa and confronted Serta management with his findings including a recommendation to recall all of the products made from the synthetic concentrate, a recall that would have involved some 700,000 cases of inventory and might possibly have bankrupted the company.

Marlowe was obligated to inform the U.S. Food and Drug Administration (FDA) of his findings and informed Serta that he would be sending a report including the recommendation to recall the products in question later that week. Serta management ignored Marlowes findings and began shipping the tainted juice out of the country clandestinely. Meanwhile, Sertas lawyers stalled FDA Administration investigators, who were asking for samples of the suspect product. It was October before fed-up FDA officials threatened a seizure unless the company issued a voluntary recall. Finally, Serta issued the recall in November 1988, but by that time all but 20,000 cases of the juice had been distributed overseas.

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A few months later, the FDA brought charges against Serta, and the court ruled in

favour of the FDA and Serta was fined $5 million, a number of Serta senior officials

were sentenced to prison terms.

In her ruling, the judge commented perhaps the most corrupt aspect of this whole thing is that after the executives knew without a doubt what was going on, they demanded that the product continue to be sold. The reason was that they still had a tremendous quantity of the product in storage, and they were determined to make as big a profit on it as they could.'' She continued in saying, the point is, when a parent buys orange juice, that parent has the expectation that the orange juice will provide nutrition for his or her infant. And these guys who were running the company knew that it was fake apple juice, they had no idea what ingredients were in it, yet they kept selling the stuff. I find it almost unbelievable.

QUESTION

As noted in the required reading, Practical Ethical Decision Making, profit, legality and self-interest provide useful and necessary core criteria; however, they need to be supplemented by ethical considerations to be ethically defensible to afford protection for directors, executives, investors, and other stakeholders.

Using the Ethical Decision Making (EDM) framework examine and assess the ethicality of Sertas decision and actions by examining the principles of consequentialism, deontoloy and justice, and virtue ethics.