Kroger, Gi­ant join rush away from ‘pink slime’

The Washington Times Daily - - Business - BY MAE AN­DER­SON

NEW YORK | Su­per­mar­ket chains Gi­ant, Kroger Co. and Stop & Shop said Thurs­day they will join the grow­ing list of store chains that will no longer sell beef that in­cludes an ad­di­tive with the un­ap­pe­tiz­ing moniker “pink slime.”

Fed­eral reg­u­la­tors say the am­mo­nia-treated filler, known in the in­dus­try as “lean, finely tex­tured beef,” meets food safety stan­dards. But crit­ics say the prod­uct could be un­safe and is an un­ap­pe­tiz­ing ex­am­ple of in­dus­tri­al­ized food pro­duc­tion.

Carlisle, Pa.-based Gi­ant Food Stores LLC on Thurs­day cited ques­tions and con­cerns raised by hun­dreds of cus­tomers as the im­pe­tus for the move, which will af­fect the 144 Gi­ant stores in Penn­syl­va­nia and the 39 Martin’s food stores it owns in Mary­land, Virginia and West Virginia.

Com­pany spokesman Chris Brand says cus­tomers felt pink slime “was not some­thing that they wanted to pur­chase.”

Kroger, the na­tion’s largest tra­di­tional gro­cer with 2,435 su­per­mar­kets in 31 states, also said it will stop buy­ing the beef, re­vers­ing it­self af­ter say­ing Wed­nes­day that it would sell beef both with and with­out the ad­di­tive.

Ear­lier Thurs­day, Stop & Shop said that while the U.S. Depart­ment of Agri­cul­ture has said the prod­uct is safe for con­sump­tion, it will stop sell­ing the beef be­cause of cus­tomer con­cerns. Stop & Shop is a unit of Dutch su­per­mar­kets owner Royal Ahold NV and op­er­ates 400 stores in the North­east.

Winn-dixie and Bi-lo also said Thurs­day they will no longer sell beef with the ad­di­tive, join­ing Safe­way, Su­pervalu and Food Lion, among oth­ers, who have said they won’t sell beef with the filler.

“Our cus­tomers have expressed their con­cerns that the use of lean finely tex­tured beef — while fully ap­proved by the USDA for safety and qual­ity — is some­thing they do not want in their ground beef,” Kroger said in a state­ment.

The low-cost in­gre­di­ent is made from fatty bits of meat left over from other cuts. The bits are heated to about 100 de­grees Fahren­heit and spun to re­move most of the fat.

The lean mix then is com­pressed into blocks for use in ground meat. The prod­uct is ex­posed to am­mo­nium hy­drox­ide gas to kill bac­te­ria, such as E. coli and sal­mo­nella.

Though the term “pink slime” has been used pe­jo­ra­tively for at least sev­eral years, it wasn’t un­til early March that so­cial me­dia sud­denly ex­ploded with worry and an on­line pe­ti­tion seek­ing its ouster from schools lit up, quickly gar­ner­ing hun­dreds of thou­sands of sup­port­ers.

Wal-mart Stores Inc., the re­tail gi­ant that sells sig­nif­i­cantly more food than any other chain, said Wed­nes­day that its Wal­mart and Sam’s Club stores will be­gin sell­ing meat that doesn’t con­tain the ad­di­tive. It did not say it would stop sell­ing beef with the filler al­to­gether.

On Thurs­day Wal-mart up­dated its state­ment to say that it will have new prod­ucts in stores as quickly as pos­si­ble, and that its meat depart­ment and cus­tomer ser­vice staffers will in­form cus­tomers who in­quire about the new meat of­fer­ings.

Other stores have come out in re­cent days say­ing ei­ther that they never sold beef with the filler or that they plan to stop do­ing so.

“Our ground beef ven­dors do not use an am­mo­nium hy­drox­ide treat­ment in their pro­duc­tion pro­cesses,” Tar­get said in a state­ment. “Any ad­di­tional ques­tions can be di­rected to ven­dors.”

The na­tion’s fran­chises are see­ing a mod­est uptick in busi­ness as they seek to re­cover ground from the re­cent re­ces­sion, ac­cord­ing to a new in­dex of the sec­tor that de­buted Thurs­day.

The new Fran­chise Busi­ness In­dex, com­piled by the In­ter­na­tional Fran­chise As­so­ci­a­tion (IFA), pulls em­ploy­ment fig­ures from the U.S. Bureau of La­bor Sta­tis­tics, per­sonal con­sump­tion ex­pen­di­tures from the Bureau of Eco­nomic Anal­y­sis, and small-busi­nesses op­ti­mism and credit con­di­tions from the Na­tional Fed­er­a­tion of In­de­pen­dent Busi­ness.

The in­dex showed a 0.3 per­cent uptick in Fe­bru­ary and 1.4 per­cent in­crease com­pared with Fe­bru­ary 2011. Based on his­tor­i­cal data, the lat­est over­all in­dex read­ing of 107.7 would be the high­est since mid-2008.

IFA Pres­i­dent and CEO Steve Caldeira said that the main pur­pose of the in­dex is to pro­vide fran­chise busi­nesses with a month-to month base of data so they can make wiser in­vest­ments.

The re­cent re­ces­sion has proved that “the state of the in­dus­try is con­stantly chang­ing,” he said. “. . . Our mem­bers need real-time data in or­der to make sound fi­nan­cial de­ci­sions, and pol­i­cy­mak­ers need to know how their de­ci­sions im­pact an im­por­tant part of the econ­omy.”

The re­cent in­dex in­creases were mainly be­cause of growth in the la­bor mar­ket and small-busi­ness op­ti­mism com­po­nents, ac­cord­ing to IFA of­fi­cials. In ad­di­tion, con­sumer de­mand im­proved af­ter be­ing flat at the end of last year.

“For the first time, the fran­chis­ing sec­tor had eco­nomic in­for­ma­tion based on solid gov­ern­ment data,” said Mr. Caldeira.

Ac­cord­ing to the IFA, fran­chise-op­er­ated busi­nesses ac­count for more than 3 per­cent of the United States’ gross do­mes­tic prod­uct. The fran­chise trade group com­prises some 300 lines of busi­ness ac­count­ing for nearly 18 mil­lion jobs.

Be­fore the new in­dex, the U.S. Cen­sus Bureau was the only or­ga­ni­za­tion to track fran­chise busi­nesses, although it only showed data about fran­chise busi­nesses across the coun­try and not how they were do­ing, as the new in­dex tries to do.

“Through the de­vel­op­ment of the eco­nomic-im­pact re­ports, the IFA be­gan work­ing with the Cen­sus Bureau to in­clude fran­chis­ing ques­tions in its eco­nomic cen­sus,” said Mr. Caldeira.

Sup­ple­ment­ing the new char­ter for fran­chises, the IFA also re­leased an up­date to its 2012 eco­nomic out­look pre­pared by IHS Global In­sight that showed lit­tle change from the pre­vi­ous De­cem­ber 2011 fore­cast of “weak growth.”

The up­dated IHS fore­cast projects that the num­ber of fran­chise es­tab­lish­ments in the United States will rise by 1.6 per­cent in 2012, down slightly from the orig­i­nal fore­cast of 1.9 per­cent. Em­ploy­ment and eco­nomic out­put growth fore­casts are un­changed at 2.1 per­cent and 5 per­cent re­spec­tively.

As­so­ci­a­tion of­fi­cials said Thurs­day they plan quar­terly up­dates of the fran­chise sec­tor out­look, in­stead of just an an­nual sur­vey.

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