Beech Nut Case Study on Ethics Essay

Words: 1866
Pages: 8

Beech-Nut a distributor of apple juice in the competitive baby food industry started purchasing apple juice concentrate from a supplier called Universal Juice Company in 1977. There should have been questions at that time because Universal Juice sold its product at around 25 percent below the market value for apple juice. John Lavery the vice president of operations received his first indication in 1978 that the apple juice concentrate from Universal might be adulterated but ignored the warnings from Dr. Jerome LiCari, Beech-Nuts director of research (Starr, 1989). Then in 1979, outside laboratory tests and an unsolicited report from a Swiss laboratory determined that the apple juice was adulterated (Starr, 1989). With each repeated …show more content…
Thirdly, the retailers, who distributed the apple drink would have overpaid Beech-Nut and incur a dishonorable reputation for selling the drink. The courts agreed with this assertion because they rewarded the retailers $2.5 million. Finally, the competitors would be competing in a dishonest and uneven playing field. They probably lost market share and profits as a result of this deception from Beech-Nut. Whether foreign consumers were harmed is dependent upon Beech-Nut disclosing the apple drink is adulterated. If this information was not transparent to the consumer then they were harmed by the violation of the code of ethics and morality. As asserted above, being deceived is a violation of trust and just because a monetary value cannot be affixed to deception it is still harmful. The question of whether there is monetary value to the deception is whether the reduced prices reflected the market value for adulterated beverage. This cannot be determined by the case study hence I concluded that Beech-Nut still benefited monetarily from the greatly price reduced apple juice. If this is the case the harm is both monetarily and ethically to the foreign consumers and retailers. The third question states that Hoyvald believed what he was doing was expected of him as president of Beech-Nut. Mr. Hoyvald stated that he first learned of the situation on June 25, 1982 and then sought and acted upon the legal advice of a number of lawyers (Buder, 1988). The subsequent actions