Cremonini Draws Criminal Inquiry For False Claims About Mad-Cow – The Wall Street Journal Jan 23,2001

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Jan 23,2001


Cremonini Draws Criminal Inquiry
For False Claims About Mad-Cow

By Yaroslav Trofimov
Staff Reporter of The Wall Street Journal

ROME — Italian magistrates have opened a criminal inquiry into acts by Cremonini SpA’s executives, saying the nation’s biggest meat company wrongly claimed in November newspaper advertisements that an international health agency had "officially declared [Italy] exempt" from mad-cow disease.

Turin magistrate Raffaele Guariniello said the executives are suspected of "fraud in commerce" because of the ad campaign, which cited a supposed declaration by the Office International des Epizooties, a Paris agency that unites 155 countries and serves as a clearinghouse for information on animal diseases world-wide. "We have contacted the presidency of the OIE, and the organization told us that it made no such declaration," Mr. Guariniello said.

Cremonini was propelled to the center of Italy’s mad-cow scare when the nation’s first case of bovine spongiform encephalopathy (BSE) — a brain-wasting disease believed to be linked to a human ailment that has taken 83 lives in Britain, two in France and one in Ireland — was found in a cow at the company’s slaughterhouse this month. The publicly traded company supplies meat to dozens of firms, including McDonald’s Corp. The slaughterhouse in question doesn’t supply McDonald’s, and the restaurant company has said it is confident its meat is safe. Cremonini shares, which fell 3% Monday to 1.75 euros ($1.64) in Milan, have declined sharply since BSE fears spread beyond Britain last fall.

A Cremonini spokesman said the company was justified in citing OIE in the ads because at the time the agency’s official Web site, which among other data compiles BSE statistics world-wide, listed no cases of the disease for Italy since 1994. He said Cremonini learned about possible fraud charges only from news reports and has not received any official notification from Mr. Guariniello’s office.

Gary Sutherland, an official of OIE, said the agency has never declared Italy to be "disease-free" on the BSE front. OIE uses that label for other cattle ailments, such as hoof-and-mouth disease, in nations that implement established screening and supervision procedures, he said, but it does not normally declare countries to be free from BSE.

In compiling statistics for its Web site OIE relies on national governments, Mr. Sutherland said, and the data for Italy merely suggested that its government had reported no official cases of mad-cow disease at the time. "Saying that a country has no reported cases of BSE is an altogether different thing from saying that it’s free of the disease," he said. The head of OIE’s information and international trade department, Dr. T. Chillaud, agreed, saying "the OIE has taken no decision on the BSE status of Italy."

According to Mr. Guariniello, the fraud charges, if proved, could lead to a jail term of up to two years and a fine of up to four million lire ($1,930) for each of Cremonini’s top executives. Under Italian law, corporate officials are personally responsible for their company’s actions.

Apart from Cremonini, Mr. Guariniello said, he is investigating about 10 Italian animal-feed manufacturers suspected of using ground-up remains of dead cattle, a banned material thought to be the main source of transmitting BSE to healthy animals.

Separately, German prosecutors said Monday they are looking into whether veterinarians in Bavaria illegally helped supply farmers in Austria and Germany with hormones, antibiotics and vaccines that can be used to fatten pigs, as the newsweekly Der Spiegel reported. Some experts have warned that people eating such pork over long periods could develop cancer or become immune to antibiotics. The revelations come just as Germany strains to regain public trust after more than a dozen cases of BSE have turned up in herds officials once considered safe.

Write to Yaroslav Trofimov at yaroslav.trofimov@wsj.com