A Joriki Beverages Inc. production facility in Pickering, Ont., is photographed on Nov. 24, 2024.Christopher Katsarov/The Globe and Mail
The beverage maker linked to Canada’s deadly listeria outbreak in plant-based milks last summer has filed for protection from creditors as it attempts to restructure, according to documents filed by its licensed insolvency trustee.
Joriki Inc., which operated a production facility in Pickering, Ont., that produced certain types of plant-based milks recalled in July, is seeking protection to restructure under the Bankruptcy and Insolvency Act.
“Please be advised that the Company is not bankrupt and has availed itself of a procedure whereby a company, with creditor and Court approval, restructures its financial affairs,” said a letter sent to creditors Friday by trustee Alvarez and Marsal Canada Inc.
The process will “allow the Company breathing room while it evaluates its strategic alternatives.”
Joriki was contracted by Danone Canada to produce plant-based milks at the Pickering facility. Several varieties of almond, coconut and other plant milks under the Silk and Great Value brands were recalled on July 8 after public-health officials linked listeria cases to a production line at the site. The outbreak led to 20 known illnesses, including three deaths.
A Globe and Mail investigation last month found the Pickering facility had not been examined by a Canadian Food Inspection Agency inspector since 2019, and that instance was for an unrelated matter involving customer complaints about mould. The Globe found the site had not been inspected for listeria, or to check the company’s listeria prevention protocols, for at least five years prior to last summer’s outbreak.
When The Globe asked the CFIA when the agency had last formally inspected the facility for listeria, the agency could not provide a date.
The Globe investigation found the CFIA had moved to a risk-based approach in recent years that used an algorithm to prioritize inspections, determining how often – or how little – food production facilities are examined by the agency. The algorithm didn’t deem the Pickering facility a high priority, and never flagged it for inspection during that time, The Globe found.
The algorithm relies mostly on information supplied by the companies themselves, The Globe found, which is often not verified by the CFIA, according to current and former inspectors.
A week after The Globe investigation was published, federal Health Minister Mark Holland called on the CFIA to review the algorithm-based system. The review will examine gaps in how the algorithm, known as “The Establishment-based risk assessment model” was designed, and how it should be improved or overhauled.
“The minister is extremely concerned,” Mr. Holland’s spokesperson Alexandra Maheux told The Globe last month.
Joriki owes $203-million to more than 200 creditors, according to the trustee. That includes $174-million to the Bank of Nova Scotia, $16.1-million to Roynat Capital Inc., $206,000 to Danone North America, and $775,000 in unpaid wages and benefits.
“After more than 30 years of operations, Joriki has made the difficult decision to file for creditor protection under the Bankruptcy and Insolvency Act. As you are likely aware, the Company has faced significant challenges arising from a product recall, including a significant loss of business and ongoing liquidity issues,” Joriki said in an e-mail.
“We have explored various possibilities that would allow us to maintain operations and protect jobs, however, at this point the company does not have the financing to continue operations. We wish to thank our team of employees for their support and hard work during this challenging period and express our deepest sympathies to the families who were affected by the outbreak.”
Joriki has four North American facilities; three in Canada and one in the U.S.
Danone Canada has moved all production to other suppliers. “We do not anticipate any disruption in supply in the short term and will work closely with our partners to ensure Canadians can continue to enjoy Silk refrigerated beverages,” Danone Canada spokesperson Jennifer Vincent said in an e-mail Friday.