AFA Foods Files Bankruptcy Citing ‘Pink Slime’ Coverage
AFA Foods, a ground-beef processor owned by Yucaipa Cos., sought bankruptcy court protection with a plan to sell some assets after media coverage of “pink slime” cut demand for its products.
The company, based in King of Prussia, Pennsylvania
, listed assets of $219 million and debt of $197 million in Chapter 11 papers filed today in U.S. Bankruptcy Court
in Wilmington, Delaware
Celebrity chef Jamie Oliver
is among food activists who have criticized the use of what they dubbed “pink slime,” a filler produced by treating finely ground beef scraps with ammonia hydroxide to kill pathogens. Beef Products Inc. last week temporarily suspended production at three plants because of consumer concerns. U.S. Agriculture Secretary Tom Vilsack said March 28 that the product, referred to in the industry as lean, finely textured beef, is safe to eat.
“Ongoing media attention has called into question the wholesomeness” of the meat, and has “dramatically reduced the demand for all ground beef products,” AFA interim Chief Executive Officer Ron Allen said in court papers.
Ground beef demand will soften in the next several months as consumers shift to meat that doesn’t contain the lean, finely textured beef, said Ann Gurkin, an analyst for Davenport & Co. Last month, the USDA said schools in the government’s lunch program can order ground beef without the product following public pressure to remove it from cafeterias. http://www.bloomberg.com/...&YM_MID=%60mmid%60