Montco processor of `pink slime' files for bankruptcy

A King of Prussia processor of the ammonia-treated beef product that some have dubbed "pink slime" is struggling for survival and filed for bankruptcy protection Monday amid public outcry about what's used in the nation's hamburger.

AFA Foods Inc., owned by Yucaipa Cos., sought approval in U.S. Bankruptcy Court in Wilmington for a plan to sell some assets. This happened just days after a competitor, Beef Products Inc., the largest producer of the filler known in the industry as "lean, finely textured beef," idled production at three of its four plants in three states for 60 days.

The move also comes after Cargill Meat Solutions, a major beef producer, said last week that it would scale back at three plants' production of the filler, made from beef trimmings and treated with ammonium hydroxide gas to kill bacteria, including E. coli. Cargill said it had no plans to close the plants.

Pink slime, a term coined by U.S. government scientist and "whistle-blower" Gerald Zirnstein to describe the unlabeled and chemically treated scrap meat going into U.S. ground beef, has been widely used in the meat-processing industry for years.

AFA Foods, which processes beef in five states including Pennsylvania, produces case-ready ground beef and individual quick-frozen hamburger patties sold to Wal-Mart, Safeway, Supervalu, BJ's, and Weis, and to eateries including Burger King, Jack in the Box, Hardee's, and Wendy's, according to court papers.

The ground beef was sold under the brand names Moran's, Stone River Ranch, and Miller Quality Meats, the bankruptcy filing stated.

"An unfounded public outcry over the use of boneless, lean-beef trimmings" and "ongoing media attention called into question the wholesomeness" of the meat. "This controversy has dramatically reduced the demand for all ground-beef products," said the company's interim CEO Ron Allen.

At a time of year Americans are usually gearing up for the spring and summer grilling season, ground-beef sales have declined, he said.

Consumer backlash has caused top supermarket chains, including Giant, Kroger, Safeway, and Supervalu (parent company of Acme Markets) to stop selling hamburger with the additive because of concern from shoppers.

Though the beef industry says the product is 100 percent lean meat and the U.S. Department of Agriculture says it is safe, images in YouTube videos and the Internet, have left a negative impression with some consumers.

Last week, the USDA said school districts could opt out of using the treated meat in school cafeterias. In August, McDonald's stopped using the product in its hamburgers; other fast-food companies have done the same.

AFA Foods is one of nine independent meat processors owned by Yucaipa Cos., whose parent company is privately held AFA Investment Inc. The firm is "one of the largest ground-beef processing enterprises in the United States," processing more than 500 million pounds of ground beef annually, court papers said.

King of Prussia-based AFA Foods listed assets of $219.6 million and debt of $197.3 million in the court papers. AFA has 850 full-time employees and $958 million in annual revenues.

Contact Linda Loyd at 215 854 2831 or lloyd@phillynews.com