After the recent public outcry over “pink slime”, AFA Foods filed for Chapter 11 bankruptcy protection today and announced that it will be selling some assets due to a sharp decrease in demand.
The company, which is based in King of Prussia, Pennsylvania, said it had secured $56 million in financing to continue operating during the bankruptcy process.
AFA Foods said in a press release that the media coverage of “pink slime” has created “changes in the market.”
Beef Products Inc., one of AFA’s chief competitors, has also seen a dramatic drop in sales and closed three of its four plants last week.
Until recently, the lean finely-textured beef, known among its critics as “pink slime”, was added to fast food burgers, school lunches, and 70 percent of all ground beef sold at grocery stores.
Due to recent consumer complaints, many several fast food chains and several of the nation’s largest grocery chains have stopped buying beef products that contains the filler.
The U.S. Department of Agriculture also announced that schools that participate in the government’s lunch program can now choose whether or not they purchase “pink slime”.
- AFA Foods files for Ch. 11, citing ‘pink slime’ (seattlepi.com)
- ‘Pink slime’ uproar forces beef processor into bankruptcy protection (business.financialpost.com)
- AFA Foods files for bankruptcy citing ‘pink slime’ (sfgate.com)
- Pa. company declares bankrupty, blames ‘pink slime’ backlash (pennlive.com)