Golden Valley-based General Mills, Inc., is suing a supplier over a blueberry shipment that it claims contained pieces of shrimp.
General Mills filed the suit against South Haven, Michigan-based Adkin Blue Ribbon Packing Company in early May in Hennepin County District Court, and it was recently transferred to Minnesota's U.S. District Court.
In 2007, General Mills agreed to buy more than 1 million pounds of frozen blueberries and 240,000 pounds of fresh blueberries from Adkin to be used in scones, according to the suit. A contract required Adkin to ship the products only if they met certain conditions, including segregating the products.
Adkin agreed to ship suitable products, or to reimburse General Mills for "all costs and damages incurred by [General Mills], including without limitation, lost profits, costs for packaging, handling, transportation, recall, destruction, production, and other administrative costs, including legal fees," that result from Adkin violating the agreement, according to the suit.
Adkin allegedly shipped some frozen blueberries in 2009 to Indiana-based IndyBake Products, LLC, a contract manufacturer for General Mills. IndyBake contacted General Mills upon discovering "multiple pieces of shrimp" in a case of frozen blueberries, the suit alleges.
General Mills claims that the "tainted blueberries were unsuitable for use in any [General Mills] product, much less the intended products," and it informed Adkin of the issue.
Adkin contacted Hanson Logistics, its warehousing subcontractor, and found that the company was indeed storing frozen shrimp with Adkin's blueberries, according to the suit. During this time, General Mills claims it was "forced to replenish its blueberry supply by incurring significant costs to transport blueberries from its supplier located in South America."
In March 2010, General Mills sent a letter to Adkin outlining the company's contractual obligations to cover damages. Adkin allegedly gave the letter to its insurer, which in turn refused to take action until General Mills sued Adkin. In its suit, General Mills seeks unspecified damages and legal fees.
Public court documents indicate that Adkin has not formally responded to the allegations in a court filing. Randy Adkin, president of Adkin, was not available for comment on Monday afternoon.
General Mills is Minnesota's eighth-largest public company based on revenue, which totaled $14.8 billion in the fiscal year that ended on May 30, 2010. On Wednesday, the company will announce financial results for its most recently completed fiscal year.