Bonsoy to settle $25 million class action over “dangerous” soy milk

Hundreds of soy milk drinkers are expected to share in $25 million in compensation, in what is believed to be the biggest settlement in Australian food safety class action history.

Law firm Maurice Blackburn was in the Supreme Court of Victoria this morning to hear if a proposed settlement with Bonsoy distributor and Australian brand owner Spiral Foods, as well as Japanese companies Muso and Marusan-Ai Co, will be accepted.

Maurice Blackburn principal Jacob Varghese told SmartCompany the three companies involved in the class action have agreed to the multi-million dollar settlement and the court has set a hearing date of January 29 to make its final ruling.

“All class members will have an opportunity to have their say and we will be making a submission that it is fair and reasonable and a good settlement,” Varghese says.

Maurice Blackburn launched the class action against Spiral Foods in 2010, claiming hundreds of Australians fell ill after drinking Bonsoy soy milk, which allegedly contained dangerously high iodine levels, between 2004 and 2009.

Under the deal being considered, Spiral Foods, Muso and Marusan-Ai Co will pay $25 million in compensation to the nearly 500 consumers in the class action, without admitting liability.

If the court accepts the settlement, which was struck ahead of a planned trial, the members of the class action could see compensation within six to 12 months. A fee for Maurice Blackburn would also come out of the settlement fund.

Maurice Blackburn filed a claim against Spiral Foods in the Victorian Supreme Court in September 2010, following the worldwide recall of Bonsoy just before Christmas in 2009. At the time, the law firm said it had been discovered that one glass of the soy milk contained seven times the safe dose of iodine.

Excess iodine has been linked to thyroid conditions that can cause severe chronic and acute illness and Maurice Blackburn said it had been contacted by many individuals, including pregnant women, who had suffered a range of symptoms related to thyroid dysfunction after drinking the milk.

“Our clients are health-conscious people – they drank this milk to improve their health, and they got sick – some critically ill,” Maurice Blackburn chairman Bernard Murphy said in 2010.

“Some have quit their jobs and lost their businesses because of their illnesses. Others live with ongoing health problems and their lives have been devastated.”

Maurice Blackburn alleged Spiral Foods breached the Trade Practices Act and was negligent for supplying the product. According to the law firm, Spiral Foods was adding kombu, an iodine-rich seaweed, to the Bonsoy milk from at least 2003.

“We are not talking about a factory-floor problem here affecting a certain batch of product, it was a very basic design flaw which affected Bonsoy milk produced over a long period of time,” Murphy said.

“Spiral Foods released a product to the market containing a dangerous concentration of iodine. The health consequences of excess iodine are well known. This danger could have been easily foreseen and its existence discovered with a simple test.”

The law firm widened its claims in early 2013 to include two Japanese firms, Marusan-Ai Co, which manufactured the milk, and Muso Co, which exported it to Australia. The amended claim also alleged the three companies failed to act on a test in mid-2006 that revealed the high levels of iodine in the milk and dismissed repeated consumer concerns about the products.

Varghese says, if accepted, the settlement will be the largest in Australian class action history in relation to food safety issues.

“It sends a message to the food industry that the class action mechanism is available to consumers to assert their rights,” he says.

“Even if each individual’s claim is too small, they can band together.”

A spokesperson for Spiral Foods told SmartCompany* as the company is committed to “providing high quality, organic food products for our customers”, it voluntarily recalled its Bonsoy products in 2009. Following the recall, the products were reformulated. 

“In keeping with Spiral Foods’ commitment to quality, Bonsoy does not include any additives, oils or flavour enhancers and remains available for sale under the new reformulation on supermarket shelves, in health shops and cafes across Australia,” says the spokesperson. 

*This article was updated on December 19 to include comments from Spiral Foods. 

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