FACTS

Mymanette M. Jarra bought one Nestle Bear Brand Powdered Filled Milk, 150g from Joy store,
when Jarra opened the foil packed she noticed objects inside it which happens to be a larvae
and the powder therein looked yellowish and lumpy. Jarra filed a complaint before DOH
Consumer Arbitration Office (CAO-NCR). During the conciliation, the CAO officer requested
the BFAD for laboratory test on the subject product. The BFAD issued the analysis and from
the sample specimen had live insect larvae and that the cream powder has a strong stale
odor rendering it unfit for human consumption. The CAO-NCR rendered in favor of Jarra and
found that the substantial evidence proved that there is a clear violation of RA 7394 and
ordered the respondent pay administrative fine Php20,000, make assurance to comply with
the provisions of RA 7394, restitute complainant of 2 bottles of RC cola or reimbursed at the
option of the complainant, pay the complainant Php5,000 expenses for pursuing the
complaint and condemnation of the subject product.
ISSUE
Whether or not the petitioner DOH did not act with grave abuse of discretion in affirming the
decision of the consumer arbitration office.
Whether or not the consumer arbitration officer properly found [nestle] liable for violation of
R.A. 7394 on the distribution of adulterated products on the basis of substantial evidence.
RULING
The Php5,000 payment for expenses in pursuing the complaint is hereby deleted. Nestle
elevated the case before the CA. The CA ruled in favor of Nestle and held that the BFAD
Report of Analysis did not state whether the sample tested was adulterated while in the
custody of Jarra or because of unsanitary manufacturing process. It could also be assumed
infested while in transit or while the product was kept in stock by the vendor not by Nestle’s
defective handling but by some other unknown reasons.
The DOH affirmed the findings of CAO-NCR that Nestle violated Art. 23 (3) of R.A. 7394 and
liable under Art. 40 (A) of the same law. The CAO-NCR and the DOH gave more credence to
the allegations of Jarra and the BFA Report of Analysis. DOH held that the welfare of the
consumer are of paramount importance as against the right of the manufacturer. The court
finds it necessary to modify the order of restitution with the same subject matter.