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Dairy company Saputo sues B.C. milk board over delivery of contaminated milk

Keith Fraser, Postmedia Network

A major dairy processor is suing the B.C. Milk Marketing Board and a dairy producer over the delivery of what it claims was more than 17,000 litres of contaminated milk.

Saputo Products Canada G.P, a Montreal-based dairy processor and cheese maker, says that on Aug. 12, 2013, the board provided 17,784 litres of raw milk to its Burnaby plant.

The next day, after Saputo had used the milk in its production process, the board and a lab determined that the milk was contaminated with an amount of bacteria in excess of the allowable limit, according to a lawsuit filed in B.C. Supreme Court.

"Prior to Saputo discovering this contamination, the contaminated milk had already been blended with uncontaminated milk in Saputo's possession," says the lawsuit.

"Consequently, a total of 223,230 litres of milk and cream was affected by the contamination which caused damages to Saputo related to 111,921 litres of packaged product. The board's delivery of the contaminated milk to Saputo caused various damages to Saputo totalling $65,317.57."

Saputo is required by law to buy milk from producers through the board and to make payment for that milk to the board, which receives that payment on behalf of the producers, says the suit.

Unless Saputo makes specific inquiries, it doesn't know which producer produces the milk that it receives, says the notice of civil claim.

"In essence, the board is the monopolistic distributor of milk on behalf of all producers in the province of British Columbia. The board deprives Saputo of having any choice with respect to the producers from whom they buy."

Saputo says that in April 2014, the board identified the producer of the contaminated milk as Chilliwack Cattle, which is also named as a defendant in the lawsuit.

After the board declined to reimburse Saputo for the $65,000 costs, the company elected to deduct that amount from a payment Saputo owed the board for a subsequent shipment of milk, says the suit.

Saputo claims that the board breached its standard of care by failing to adequately test the milk it distributes and is seeking a court declaration that it was entitled to deduct the $65,000.

The company is also suing the board over the delivery in February 2015 of more than 120,000 litres of organic milk to Saputo's Burnaby and Abbotsford plants.

It says that shortly after the delivery, the Canadian Food Inspection Agency advised Saputo that it was conducting an inspection of the milk to determine whether it was unfit for human consumption because it had been produced from cows whose feed had been contaminated by aflatoxin, a potent human carcinogen produced by moulds.

Nearly a week later, the agency notified Saputo that it had concluded its health risk assessment and determined milk co-mingled with the suspect milk would not pose a significant risk to human health, says the lawsuit.

But the delays in processing the suspect milk due to the agency's investigation caused the company to suffer various damages totalling $26,303, says the suit.

The $26,000 was deducted from a payment subsequently made by Saputo to the board, says the writ.

Saputo says it was informed that the producer of the suspect milk was Cedar Valley Farms, owned by Cedarwal Farms Ltd., which is also named as a defendant in the company's lawsuit.

No responses have been filed to the lawsuit, which contains allegations that have not been tested in court.

B.C. Milk Marketing Board spokesman Robert Delage said the board is seeking outstanding payments owed from Saputo to the board.

“We cannot get into the details at this time, but we look forward to the matter being resolved in the near future,” Delage said.

kfraser@postmedia.com