An embattled Alberta meat packer will soon be managed and possibly bought by the world’s largest animal protein processor.
Effective immediately, XL Foods Inc. has reached a deal with Brazilian-controlled JBS to operate its feedlots and processing plants, including the 4,000 head-a-day facility in Brooks that was shuttered recently by federal food inspectors due to an E. coli scare.
“We know full well the commitment it takes to manage world-class operations that produce safe and nutritious products,” Bill Rupp, president of JBS’s U.S. division, said in a prepared release.
“We believe our experienced team will provide an invaluable asset in the management of XL Lakeside and we look forward to to exploring our options to purchase XL assets in the near future.”
Under the deal, JBS has the exclusive option to buy the plant, feedlot and farming operations in Brooks, plus packing facilities in Calgary, Omaha, Nebraska and Nampa, Idaho, for $100 million. Half the payment would be in cash and half in JBS shares.
“Under no scenario will JBS assume any of XL Foods’ debt or liabilities,” the company release said.
Officials with Nilsson Bros Inc., XL’s parent company, could not be reached immediately for comment, but a company insider said the firm had been hit hard by the recent closure of its Brooks plant and the country’s largest ever beef recall.
With sales of more than $30 billion a year, JBS S.A. became the world’s largest company in the beef sector with its 2007 acquisition of the U.S.-based Swift and Company.
South of the border, the firm operates eight cattle processing plants, one processed meat facility, a tannery and a dozen feedlots.
Workers at the Brooks plant were laid off again Wednesday as federal food inspectors analyzed test results from the processing of 5,000 carcasses to ensure contaminated product isn’t being produced.
The Canadian Food Inspection Agency said an assessment of those results — a necessary step before XL Foods Inc. can resume normal operations — won’t be completed until early next week.
About 800 of the facility’s 2,200 workers were recalled earlier this week to complete the deboning and cutting of carcasses that were left at the plant when it was shuttered Sept. 27 by CFIA officials.
Doug O’Halloran, president of the United Food and Commercial Workers local that represents most plant employees, said his members have been laid off again and the union is waiting for the federal agency to decide if and when the plant can reopen.
“I don’t really understand the need for further testing given that these carcasses have already been found to be clean,” O’Halloran said.
“The real test will be when the plant resumes slaughtering cattle, something I had hoped would happen this week.”
While the union bosses estimate the company has paid out $3 million in wages to workers during the shutdown, he is worried that if the current layoff drags on, some employees will leave for jobs elsewhere.
“Our big concern is that when it does reopen that there are enough inspectors with greater authority to stop or slow the line if they spot a problem,” O’Halloran said.
“The front-line people with CFIA need to have ability to exercise their judgment and err on the side of caution even if it means lost production.”
In Ottawa, the New Democrats said they would introduce a motion Thursday calling for the resignation of Agriculture Minister Gerry Ritz, the reversal of cuts to CFIA’s budget and a request for the federal auditor general to investigate.
“Self-regulation doesn’t work,” NDP agriculture critic Malcolm Allen said in a news release.
“It’s that simple and we’ve seen its results.”
Public health officials have said 15 people in four provinces have now become ill from a strain of E. coli linked to product from the plant.
CFIA suspended the plant’s operating licence after repeated shipments of tainted meat were intercepted in early September at the U.S border and at another facility in Calgary.
An investigation found shortcomings in the facility that included a clogged carcass washer and insufficient analysis of test results to ensure contaminated lots were being diverted.
Raj Sherman, leader of Alberta’s Liberals, said the federal and provincial agriculture ministers need to convene a meeting with CFIA officials and XL Foods’ owners to establish what went wrong at the plant and what needs to be fixed.
“They shouldn’t leave the room until they’ve got answers,” said Sherman, “and are prepared to to bring forward a solution to get the plant back open and running.”
CFIA officials said in a release that they continue to maintain strict oversight of meat products from the plant being shipped for rendering, a high temperature disposal method.
“No products from this facility will enter the marketplace until the CFIA is fully confident that the plant’s food safety controls are working effectively,” the release said.
The agency did not immediately respond to questions about whether the company will be allowed to ship meat or beef trim currently in the plant to restaurants or retailers if it again tests negative for E. coli.
The discovery of tainted beef from the Brooks plant has resulted in the largest beef recall in Canadian history.
CFIA extended the recall of XL Foods products again late Tuesday to include additional brands sold under different product names in British Columbia and Alberta.
Company officials could not be reached immediately for comment.
Source: Google news
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