By LEONARD BUDER
Published: November 14, 1987
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The Beech-Nut Nutrition Corporation pleaded guilty yesterday to Federal charges that it had sold phony apple juice intended for babies and agreed to pay a $2 million fine. The corporation also agreed, as part of a plea arrangement with the Government, to pay $140,000 in investigative costs to the Food and Drug Administration. Beech-Nut, a subsidiary of Nestle S.A. of Switzerland, is the second-largest maker of baby food products in the United States after the Gerber Products Company.
''We believe that Beech-Nut's fine represents the largest fine ever paid under the Food, Drug and Cosmetic Act by at least sixfold since the act's enactment in 1938,'' Richard K. Willard, the Assistant Attorney General in charge of the civil division, said in Washington. The Federal indictment, announced a year ago, charged that Beech-Nut and other defendants had intentionally shipped adulterated and misbranded juice to 20 states, Puerto Rico, the Virgin Islands and five foreign countries with the intent to defraud and mislead. The pleas covered acts committed from December 1981 to March 1983.
It said that the product that Beech-Nut had been marketing as 100 percent apple juice was actually made from beet sugar, cane sugar syrup, corn syrup and other ingredients, with little if any apple juice in the mixture. Prosecutors said at the time of the indictment that the bogus apple juice cost about 20 percent less to make than real apple juice.
On Monday, two former top officials of Beech-Nut and two other defendants are scheduled to go on trial in Brooklyn before Federal District Judge Thomas C. Platt, who accepted yesterday's plea. The former officials - Niels L. Hoyvald, who was president and chief executive of Beech-Nut at the time of the indictment last year, and John F. Lavery, then vice president for manufacturing at the Beech-Nut...