‘Pink slime’ processor files for bankruptcy

By Melodie Michel

- Last updated on GMT

‘Pink slime’ processor files for bankruptcy

Related tags: Ground beef, Meat, Beef

US ground beef processor AFA Foods has filed a bankruptcy petition, citing the ‘pink slime’ scandal that has been shaking the American meat industry for months.

The Pennsylvania-based company said that the impact of recent media coverage related to Lean Finely Textured Beef (LFTB), commonly referred to as ‘pink slime’, had brought changes in the market that required “an orderly sale of some or all of its assets”​ to preserve value for its stakeholders.

It filed a voluntary petition in the District of Delaware to obtain the basic financing necessary to preserve continuity for its customers, employees and business partners, while it negotiates the best possible outcome with potential buyers.

“As an industry-leading ground beef processor, AFA Foods brings significant value to customers, suppliers and potential buyers, based on our long-standing customer relationships, robust product offering and proven focus on quality and safety,”​ said interim CEO Ronald Allen.

“We believe an orderly sale (...) will allow us to unlock this value and provide a smooth transition for our employees, customers and other business partners.”

Meat associations regretted the closure, blaming media coverage of the 'pink slime' scandal for "unnecessary" job losses. American Meat Institute (AMI) president and CEO J Patrick Boyle said: "It is infuriating to hear the impact this unnecessary scare is having on companies that produce ground beef. No one should have to lose their job over a product that has been given an unfair, catchy nickname that misleads consumers. We’ve said it before and we’ll say it one more time:  Lean finely textured beef is a safe and nutritious beef product that has been used for two decades. 

"It is produced according to U.S. Department of Agriculture (USDA) rules and under USDA inspection.  USDA’s confidence in the product is evidenced by the fact that it buys the product for its feeding programs.  Its safety and wholesomeness is further bolstered by support from leaders in the consumer and food safety communities.

"Removing lean finely textured beef from ground beef has consequences for both companies and consumers. For consumers it means the price of ground beef will go up. Companies must quickly adjust to a smaller supply of beef available to them and this will force some to adjust the way they produce their ground beef."

"Dude, it's beef," say governors

Last week, major LFTB producer Beef Products Inc (BPI) closed three of its four processing plants as “a direct reaction to all the misinformation”​ about ‘pink slime’, prompting industry leaders and government representatives to start a campaign defending the product.

A group of governors from Texas, Iowa, Kansas, Nebraska and South Dakota took a walking tour of the only BPI facility remaining in operation in Nebraska, launching an unofficial new slogan for LFTB: “Dude, it’s beef.”

Kansas governor Sam Brownback said that this “unwarranted food scare”​ was likely to see the price difference grow between lean and fat ground beef. He added: “If there is a safety issue, I am absolutely for going after it and we have, but that is not what this is. This isn’t merited. My hope is that people will take another look at it and realise that this is a quality beef product.”

The US Department of Agriculture reiterated its stance that the product is safe, despite its recent decision to allow schools to serve meals without LFTB in response to consumer fears over the process used to produce it, especially the use of ammonium hydroxide.

Texas governor Rick Perry urged the media to start reporting the facts instead of spreading misinformation. “Let’s call this product what it is and let ‘pink slime’ become a term of the past,”​ he said, adding that the current difficulties encountered by the beef industry were all due to the media referring to LFTB as ‘pink slime’ in the first place. “If you had called it finely textured beef would we be here?”​ he asked journalists.

Since the beginning of the ‘pink slime’ controversy, various restaurants and retailers have committed to stop serving LFTB, including McDonald’s, Burger King, Safeway and Supervalu.

Related topics: Meat

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