Beef processor seeks protection of courts as ‘pink slime’ hits demand

American ground beef processor AFA Foods has sought bankruptcy court protection with a plan to sell some assets in the US after media coverage of “pink slime” cut demand for its products.

The Yucaipa member company, based in Pennsylvania, listed assets of $219m (€165m) and debt of $197m (€148m) in the papers filed in US bankruptcy court in Wilmington, Delaware.

Beef Products Inc, an AFA rival that treats boneless lean beef trimmings with ammonia hydroxide to kill pathogens, last week temporarily suspended production at three plants because of consumer concerns about the product, dubbed “pink slime” by food activists.

US agriculture secretary Tom Vilsack said that the product — referred to in the US agri-food industry as lean, finely textured beef — is safe to eat.

AFA interim chief executive Ron Allen said in court papers: “Ongoing media attention has called into question the wholesomeness” of the meat, and has “dramatically reduced the demand for all ground beef products”.

Last month, the US Department of Agriculture said that schools in the government’s lunch programme can choose to order ground beef without the lean, finely textured beef following public pressure to remove the product from cafeterias.

Several fast-food restaurant chains stopped using the lean beef, including McDonald’s, Burger King, and Taco Bell.

Among AFA’s largest unsecured creditors listed in the court petition are Orleans International Inc, owed $8.3m (€6.2m), and Tyson Fresh Meats, owed $3.27m (€2.45m).

AFA official stated: “AFA continues discussions with potential buyers to secure the highest and best outcome for its business.”

Los Angeles-based Yucaipa, which owns AFA Foods parent AFA Investment Inc, is run by billionaire Ron Burkle.