Archives for October 2012

By Glen McGregor, Ottawa Citizen October 20, 2012

OTTAWA – The Brazilian-owned company taking over a troubled XL Foods facility in Alberta is being sued by a U.S. government agency for alleged mistreatment of Muslim, Somali and black employees.

JBS USA will assume management of the XL Foods facility in Brooks, Alta., the source of E. coli contamination that last month triggered the largest meat recall in Canadian history.

The U.S. branch of the Brazil-based company is defending lawsuits in Colorado and Nebraska brought by the Equal Employment Opportunities Commission in 2010 that claim employees were subject to “hostile work environment because of their race, national origin, and/or religion.”

Many of the employees working the kill floor at the Brooks plant that JBS USA will manage are temporary foreign workers. Many are black and some come from Somalia.

One lawsuit, filed on behalf of employees of JBS USA’s Swift & Co. facility in Greely, Colo., claims their supervisors and other workers threw meat, blood and bones at the workers and also used offensive language toward them.

The allegations have not been proved in court.

The company did not respond to calls requesting comment on Friday. But in court documents, JBS USA denied it committed unlawful employment practices. It denied there was harassment and argued that the EEOC should have first exhausted administrative remedies before suing.

The complaint claims the company did not accommodate the needs of Muslim employees to pray five times daily during Ramadan and retaliated against those who used bathroom breaks to pray.

It also alleges that Swift employees turned off water fountains or cordoned them off with red and yellow tape usually used to denote rotten meat, so that they couldn’t drink water while fasting for the religious holiday.

Similar litigation in Nebraska alleges that employees at JBS USA’s Grand Island, facility were harassed with comments made by supervisors. It also claims a failure to accommodate the religious beliefs of Muslim employees. Some employees who protested lack of Ramadan accommodation were unlawfully terminated by claiming they had engaged in an unauthorized work stoppage, the lawsuits allege.

The EEOC said it received more than 160 complaints against JBS USA in the two states in 2008. The litigation against the company was launched after the EEOC investigated the claims.

The cases are scheduled for trial next April.

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© Copyright (c) The Edmonton Journal

 Original source article: Company taking over XL Foods being sued over alleged racial and religious harassment

By Bryan Weismiller, Calgary Herald October 21, 2012 9:01 PM

BROOKS — A steady stream of dump trucks rolled into a Brooks landfill through the weekend, teeming with recalled beef from the XL Foods Inc. plant.

The first load arrived at about 8 a.m. Saturday for disposal at the Newell Regional Solid Waste Management Authority. By late Sunday, approximately 600 tonnes of frozen product had been dropped off, said landfill manager Ray Juska.

“We don’t normally work Sunday and we don’t normally work until 10 o’clock on Saturday night either,” Juska said. “Hopefully they’ll run out of stuff to send us soon.”

The meat is being compacted in an industrial-grade, clay-lined cell.

Juska said much of the dumped contents are offal — internal organs and discarded byproducts from slaughter — although some hamburger has also been delivered.

“We’re all waiting for the striploins to show up,” he said.

Federal food inspectors have seized more than 5.5 million kilograms of beef from the beleaguered plant at the heart of a massive E. coli recall.

On Friday, the Canadian Food Inspection Agency said the meat packer may be allowed to send some of the recalled beef to market if it is cooked at a high enough temperature to kill off any possible bacteria.

But later that day, the agency said all meat involved in the recall had been returned to XL Foods and will be destroyed. CFIA officials have been overseeing and monitoring the disposal of the meat at the landfill.

The CFIA announced Friday it would be drafting recommendations for the shuttered plant over the weekend.

Brooks Mayor Martin Shields expects the town’s largest employer will reopen this week. Shields said he was told by the plant’s manager that groups of workers would be recalled on Monday for an orientation with the new owners, Brazil-based JBS USA.

A CFIA spokeswoman said it’s too early to speculate on when the meat packing facility will resume normal operations.

But Shields expects the inspection agency will give the green light to Federal Agriculture Minister Gerry Ritz by Tuesday.

“Sounds pretty clear to me that it’s going to go ahead,” he said in an interview.

However, the mayor is quick to point out that everything is not rosy in cattle country. He said more than $200,000 in wages is lost each day while 2,000 plant workers sit at home.

The XL Foods plant — closed since Sept. 27 — is the town’s economic engine, employing roughly one in every six residents.

“We’re dealing with an economic situation,” Shields said. “People have to understand there are still a lot of people at the food bank.” Speaking to reporters in Edmonton Saturday, Premier Alison Redford said it is “the end of the third week of a very difficult situation.”

“Every time I talk about it, the first thing I say is the quality of the product we are producing in Alberta is of a high quality and high standard,” Redford said. “It’s an excellent product and we want to encourage people to keep consuming it.”

Some 16 people across the country have become sick from bacteria in products sourced from the Brooks meat-packing plant.

A battle broke out on Twitter on Sunday when Opposition Leader Danielle Smith appeared to endorse feeding the recalled meat to the hungry rather than disposing of it. In a response to a Tweet from an individual who questioned, “Is there no way to cook it so it’s safe and feed the hungry?”, Smith responded, “I agree. We all know thorough cooking kills E. coli. What a waste.”

NDP Leader Brian Mason instantly responded, tweeting, “I’m appalled that a public official would suggest feeding tainted meat to ABans living in poverty.”

Smith went on to tweet that she would hate to see good food destroyed if there was a way to salvage it, and that if the recalled beef could be sold, she would be among the first to buy it.

With files from Amanda Stephenson, Calgary Herald, and The Canadian Press

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© Copyright (c) The Calgary Herald

Original source article: UPDATED: Twitter battle breaks out over landfill dumping of beef from XL Foods

By Tamara Gignac, Calgary Herald October 19, 2012

While all beef from the XL Foods Inc. recall will be destroyed, the fate of another huge quantity of the company’s beef — which shows no sign of a dangerous bacteria — remains unknown.

More than 5.5-million kilograms of beef from the Brooks plant was detained across the country during the crisis as a precautionary measure. The Canadian Food Inspection Agency says the meat, which includes steaks and roasts, has tested negative for the deadly E. coli bacteria.

The agency has given XL Foods three options for that meat.

“It could go to rendering, it could go to the landfill, it could go to cooking,” said Dr. Harpreet Kochlar, the CFIA’s executive director of western operations.

“We don’t have a plan presented by the company, so we can’t speculate.”

Regulations require the meat to undergo additional tests before it can be sent back to market.

An undisclosed quantity of recalled beef products returned to stores by consumers is not eligible for “reconditioning,” noted Paul Mayers, the CFIA’s associate vice-president of programs.

“Where product has remained in the control chain, options can be considered around the return of that product to a marketable state,” he said.

“However, once product goes outside the chain, then product integrity can’t be assured.”

The detained meat from more than 5,000 carcasses at XL Foods tested negative for the E. coli bacteria, safety officials said Friday.

It’s still unknown when the Brooks facility will be allowed to reopen. The plant has been shuttered since Sept. 27, when the discovery of tainted beef prompted the federal government to revoke its operating license.

The CFIA plans to finalize its recommendations over the weekend after reviewing the plant’s E. coli control strategy, meat hygiene and overall sanitation practices.

“When the plant is allowed to reopen, it will resume operations under enhanced oversight which will continue as long as the CFIA deems necessary,” said Mayers.

Some 16 people across the country have become sick from the bacteria — including a new case announced Friday involving an infected patient in Quebec.

According to the Public Health Agency of Canada, the most recent illness is directly linked to the same strain of E. coli 0157 observed during the CFIA investigation.

With its losses mounting, beleaguered XL Foods announced plans this week to sell its slaughterhouse in Brooks and other assets to multinational meat giant JBS USA.

The Brazilian-based company has an option to buy XL’s beef packing plants in Calgary, Nebraska and Idaho, as well as a feedlot in southeastern Alberta and adjacent farmland.

Acquired in 2009, XL Foods’ packing house in Brooks was processing 40 per cent of Canada’s beef before its licence was suspended.

The CFIA’s investigation has prompted criticism from the United Food and Commercial Workers union, which represents employees at the plant.

Union officials have cast doubt on the ability of federal inspectors to properly do their jobs — an assertion the CFIA says is without merit.

“We remain open to working with staff to improve food safety. That is why we have reached out to the union several times … to get evidence of facts they might have. To date we have not received a response,” Mayers said.

© Copyright (c) The Calgary Herald

Original source article: Millions of kilograms of XL beef has tested safe: Now what to do with it?

By Keith Gerein, Edmonton Journal October 19, 2012

EDMONTON – Alberta taxpayers could soon be on the hook for a pair of new financial perks for MLAs, as a legislature committee on Friday voted for an enriched RRSP benefit and reintroduced the idea of a transition payment for politicians leaving office.

While critics such as Wildrose Leader Danielle Smith blasted the move as another excessive infringement on the provincial treasury, PC MLAs on the members’ services committee defended the changes as necessary incentives to convince top candidates to leave their careers for public office.

“We made a decision we don’t want to go to pensions, but we still need a retirement package that is fair and clear,” said PC caucus whip Steve Young, who proposed the new perks.

The committee has been conducting an overhaul of MLAs’ pay and benefits. Recommendations from former Supreme Court Justice Jack Major for a simplified salary system were largely implemented earlier this year, but there has been disagreement about what sort of retirement benefits to offer

Under the old system, departing MLAs were given a lucrative “transition allowance” that saw former speaker Ken Kowalski walk away with $1.2 million and former premier Ed Stelmach take home nearly $1 million. Amid public outrage over such payouts, Premier Alison Redford campaigned to abolish transition allowances and the legislature followed through with a motion in May.

Various alternatives have since been discussed, including Major’s suggestion that MLAs receive a “defined benefit” pension that would provide a target return each year.

The members’ services committee rejected that option Friday, along with all other types of pensions, as potentially too risky for taxpayers, who could wind up on the hook for any unfunded liabilities in the pension plan.

Instead, the PC members of the committee moved to compensate departing MLAs through their personal RRSPs.

Under current rules, the maximum $22,970 that can be put into an RRSP is covered on a 50-50 basis, with taxpayers and MLAs each contributing half ($11,485). But the change approved Friday will see taxpayers cover 100 per cent of the tab.

“We cannot cut these people off with nothing when their time is over. The workload is incredible but so is the responsibility,” PC committee member David Dorward said.

Smith criticized the PC members as out of touch with average Albertans, who do not typically get 100 per cent of their RRSP contributions paid by their employers. She described the change as essentially a $11,485 pay raise for politicians.

“We are trying to get the kind of proposal that is available in the real world,” she said. “There normally is some kind of matching requirement. Taxpayers don’t have the opportunity to vote themselves a similarly generous contribution.”

Derek Fildebrandt, Alberta director of the Canadian Taxpayers Federation, said the only fair system is when MLAs put in the same amount as the public. NDP Leader Brian Mason said he would also like to see MLAs contribute something, though he didn’t say what the percentage should be.

In addition to the RRSP change, Young proposed outgoing MLAs be compensated with a “departing allowance.” Though essentially the same concept as a transition allowance, Young said his proposal would be much more modest since it would give MLAs one month’s salary for every year of service, up to maximum of 12 months. If eventually approved, backbenchers who serve 12 years or more would get an extra $134,000 when they left office, while cabinet ministers would take home a maximum $201,000.

Speaker Gene Zwozdesky, who chairs the committee, suggested the proposal was out of order since it appears to contravene the legislature’s decision in the spring to ban transition allowances.

The committee eventually voted to forward the issue to the legislature for debate.

“What we had before was too much, so we need to have one that reflects the transition into public life,” Young said. “Where Albertans were so offended was when long-standing folks came out with this big cheque that did not pass the smell test. With this (proposal), we’re seeing the best case scenario, as this is a reasonable cheque.”

Smith said she needed to discuss the “departing allowance” idea with her caucus before taking a position. However, she said the Tories seemed to be breaking Redford’s campaign promise of an end to transition allowances.

“That was a pledge of immense symbolic significance for the legitimacy of their re-election,” Fildebrandt said. “If they go back on this, it will be clear sign they only made the promise for the purpose of hanging onto power.”

Redford’s press secretary, Kim Misik, would not comment.

Mason said he needs time to consider the proposal, while Liberal Leader Raj Sherman abstained from voting, saying MLAs should not be setting their own pay and perks.

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© Copyright (c) The Edmonton Journal

By Kelly Cryderman, Calgary Herald October 19, 2012

LETHBRIDGE — In a city surrounded by Wildrose MLAs, Premier Alison Redford tried Thursday to make the case for southern Albertans to come back into the Tory fold.

Speaking at the Alberta Progressive Conservative leader’s dinner, the premier recalled a conversation with former premier Peter Lougheed, who in 1971 headed a government largely locked out of southern Alberta — a situation Redford finds herself in now.

“I asked him what he did in 1971 to ensure continued success and how he changed the map,” she told the fundraiser audience of more than 400.

Following the April election this year, the legendary Alberta leader advised Redford to work for the best of the whole province, no matter what the electoral map looked like.

“We live by that example,” she said, praising the late premier. “We are committed to ensuring that we will govern for all Albertans.”

Redford used the Lethbridge speech to outline the more than 100 trips her MLAs have in recent months taken to southern Alberta, “truly one of the best parts of our province.”

She announced a new party office in the Lethbridge area — the first outside of Edmonton and Calgary, and one which party officials say should be up and running within six months.

But Lethbridge is a lonely Progressive Conservative island. Its two Tory backbenchers are surrounded by a sea of Wildrose MLAs. Dissatisfaction in southern Alberta over a number of Redford government decisions, including the cancellation of a police college in Fort Macleod and the closure of a long-term care centre for seniors with dementia in the aging community of Carmangay, hasn’t been forgotten.

“We used to be a strong PC area,” Carmangay Mayor Kym Nichols said in an interview Thursday.

“There still was a lot of PC supporters, but the fact that (Redford) never, ever acknowledged it, what was going on here — and she still hasn’t acknowledged it — kind of feels like a slap in the face,” said Nichols, who still holds out hope the Little Bow Continuing Care Centre will be reopened.

Livingstone-Macleod Wildrose MLA Pat Stier, one of 17 members of the official Opposition party, described the suggestion that PCs could once again take southern Alberta “more than presumptuous.”

Earlier in the day, at an announcement on the expansion of the Chinook Regional Hospital, Redford addressed another simmering issue. She said her government is in talks with the town of Fort Macleod over the police college project her government cancelled in August.

She said she wants to make sure the municipality is covered for the money it had already sunk into infrastructure for the $122-million project, which had been long promised by the province.

“We’re working very closely with them to make sure that they’re not out of pocket,” the premier said.

Fort Macleod Mayor Shawn Patience wouldn’t speak about the issue on Thursday, citing the ongoing negotiations with the province, but wrote a letter to a local paper this week stating: “We have made every effort to have the training centre reconsidered, but unfortunately none of those efforts have been effective.”

Despite a number of decisions that continue to be perceived as missteps in southern Alberta, hope springs eternal for the long-governing PCs.

Greg Weadick, one of the two Lethbridge Tory MLAs, said the premier has made efforts to meet with everyone from southern Alberta hospital officials to beef producers.

He feels certain that with some special attention to the issues close to southern Albertans’ hearts, such as an improvement in ambulance dispatch services, the party can improve its political fortunes.

“There are some issues that they would like to see resolved and many of them are about health care,” Weadick said.

John Kolk, the failed PC candidate in Little Bow in last April’s election, said the party will “redouble its efforts” in the region to prove to southern Albertans that the party represents their long-term interests. He insists the Wildrose party’s domination in southern Alberta is temporary.

“The wave is changing,” Kolk said at the Lethbridge dinner Thursday night. “Most prairie fires only burn for so long.”

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© Copyright (c) The Calgary Herald

By Amanda Stephenson, Calgary Herald October 19, 2012

Eager to get back to work, XL Foods workers and union leaders were hopeful new management by meat packing giant JBS will help the beleaguered Brooks packing plant.

Union leaders pledged to hold the world’s biggest beef processor’s “feet to the fire” as JBS Foods prepares to take over management of the embattled XL Foods processing plant at Brooks.

United Food and Commercial Workers Local 401 president Doug O’Halloran said at a press conference Thursday that he views the move by the Brazilian-based JBS to assume management of the Brooks plant as a positive step. However, he said neither new management nor eventual new ownership at XL can fix what is wrong with Canada’s food safety system, which he described as “broken”.

O’Halloran said he will be pushing for JBS to include whistleblower protection in the union contract, so that workers who spot potential food safety issues feel comfortable speaking up.

He added JBS has already assured the union it will honour the existing contract XL has with its workers regarding wages and benefits, and has promised to recall all laid-off XL employees once the current CFIA investigation is complete and the plant is given the go-ahead to resume operations.

More to come.

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© Copyright (c) The Calgary Herald

Original source article: Union pledges to hold new management’s ‘feet to the fire’ at XL Foods (with video)

By Dave Cooper, Edmonton Journal October 18, 2012

EDMONTON – A leak from a small oil-collector pipeline on Shane Tower’s Breton-area property in June looked like a dark stain on his freshly seeded land.

But the event has escalated, with pipeline owners Sinopec Daylight Energy appearing before a judge on Thursday, seeking access to Tower’s property, 75 kilometres west of Leduc, so they can finish site restoration and restart pumping. The company can’t put the well back into production until the pipeline is covered and the line tested. Tower has refused to let them on his land until they agree to compensation.

Daylight was not granted an injunction Thursday and the case is scheduled to be heard in an Edmonton courtroom on Nov. 27.

“We simply don’t know what else to do. We could resolve this in 15 minutes if Daylight would sit down,” said Tower. “Right now there is a 150-foot trench surrounded by fencing and I have to drive through a field to get to my new house.”

Tower said he won’t budge and let Daylight finish its work — a new segment of pipe is already installed — until it agrees to compensation. “I have sunk $50,000 into this to date for a lawyer to try to negotiate agreements and my lost wages. And if I have to build a new driveway because they won’t let me use the drilling access road which I have always been able to use, that will be another $50,000.”

Randy Ford, vice-president of drilling for Daylight, said his firm had a worksite agreement with Tower to work on their right-of-way, “and he is not allowing us back in.”

Ford could say little about the case.

“Maybe we will be able to resolve this before the case goes to court.”

There also appears to be an issue with a water well on Tower’s property. It was drilled in 2009. After the Daylight rupture, water in the well was tested as part of an environmental study around the spill site. The results showed high levels of benzene and other toxic hydrocarbons in the water. Tower doesn’t know the source, but notes the only oil well on his land is the 1960s-era well that is hooked up to the pipeline that ruptured. There are also wells on neighbouring properties.

“We have been on bottled water ever since we found out, but were advised by the health authorities not to even bathe in this water. We have horses on the property as well,” he said.

Tower works as a well-completion consultant and is away from home working on drilling rigs much of the time. His wife and children tried to avoid the property during the summer.

“They went on a lot of camping trips. It is terrible and we were thinking of selling this property, but who is going to buy land with no drinking water?”

Daylight provided a portable cistern with fresh water, but Tower says the company doesn’t intend to winterize it. Without a thorough — and expensive — environmental assessment, Tower doesn’t know where to drill a new well.

“I don’t know the extent of the contamination. We are in a boggy area and everything flows into this area.”

The Energy Resources Conservation Board is investigating the original pipeline rupture, says a spokesman.

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© Copyright (c) The Edmonton Journal

By Marty Klinkenberg, Edmonton Journal October 18, 2012

EDMONTON – The threat to Canada’s beef industry from E. coli was underscored this week when one of its biggest players was toppled in the wake of the largest meat recall in the nation’s history.

With its losses mounting, XL Foods of Edmonton announced plans Wednesday to sell its slaughterhouse in Brooks and other assets to a multinational giant for $45 million less than it paid just three years ago.

As part of the $100-million agreement, JBS USA has taken immediate control of the facility that was shut down by federal regulators on Sept. 27 due to contamination with E. coli. In addition, the company has an option to buy beef packing plants in Calgary, Nebraska and Idaho, as well as a feedlot in Brooks and adjacent farmland.

Experts say it is no surprise that XL’s owners, Edmonton-based Nilsson Bros., decided to sell in the face of a financial tsunami. In the last month, XL Foods had likely lost more than $100 million in recalled products alone, not to mention the cost of recalling them from across North America and Puerto Rico. It also faces possible litigation from 15 people who have contracted E. coli poisoning, and was likely to lose market share due to waning consumer confidence.

“Generally, recalls are small, isolated events, but some of them get bigger as they go and become very large events,” said Ted Schroeder, a research professor and livestock marketing analyst at Kansas State University. “When it happens, it often ends up in a major restructuring like this.

“A company the size of XL Foods can’t have a plant shut down and keep paying its debts. They are often forced to sell before they lose everything.”

Acquired in 2009, XL Foods’ packing house in Brooks was processing 40 per cent of Canada’s beef before its licence was suspended three weeks ago by the Canadian Food Inspection Agency. Investigators are still assessing safety improvements that were ordered at the plant after E. traces of E. coli were detected in some of the 1,800 products recalled over the course of a month beginning on Sept. 16.

Although it is unclear how much Nilsson Bros. owes banks and other companies, Brian and Lee Nilsson had to dig deep to buy the now-shuttered packing house in Brooks.

To finance the purchase, a consortium of lenders headed by HSBC Bank Canada gave XL Foods a $225-million line of credit at an interest rate of 25 per cent. In addition, the Nilsson brothers used their 75,000-head feedlot operation and other lands near Brooks as collateral on an $18-million mortgage from Metropolitan Life Insurance Co. and a $20-million loan from the Bank of Nova Scotia, the latter at a rate of prime plus 10 percentage points.

“If this situation hadn’t occurred, XL Foods probably would have been fine,” Schroeder said. “But the company was expanding rapidly and because of that they were in a risky financial position. This became a real back breaker.”

Even before the biggest recall in Canadian history, the beef industry was paying a heavy cost due to E. coli. Recent studies done by researchers Kevin Grier and Claudia Schmidt at the George Morris Centre, an agricultural think-tank in Guelph, Ont., estimated that negative publicity generated by E. coli-related recalls costs cattle producers $100 million in lost sales a year.

That cost is above and beyond the cost of the recalls themselves, which become gradually more expensive based on scope and size. Recalling and then disposing products in a larger recall costs companies a minimum of $2 million, but complications in the XL Foods case would drive the cost dramatically higher.

In addition, demand and cattle future prices have been driven down by publicity generated by the recalls. At present, Grier estimates buyers are paying farmers in Alberta about less $50 per head than normal because feedlots are overcrowded and the closure of XL Foods’ plant has made it more difficult to find a processor.

“It has been very damaging when it comes to demand,” Grier said. “Every retailer I have spoken to tells me beef purchases are down 40 to 50 per cent. And during the height of the crisis, future process dropped dramatically.

“E. coli recalls scare traders, and that causes lower prices for the short term.”

The Morris Centre’s research shows that the beef packing industry spends more on E. coli prevention than on any other intervention — approximately $14.1 million each year. Those estimates do not include the cost of having to retool or clean a plant after multiple findings of E. coli bacteria, such as the case involving XL Foods.

Because of that the company incurred additional labour costs related to quality control and quality assurance, as well as lost production. Damage to its reputation threatened its long-term market share.

When it comes to selling, Grier said, “I would say that XL Foods certainly would not have found itself in a strong negotiating position. The pool of qualified buyers was one. The circumstances were pretty difficult.”

Union officials on Thursday met with representatives of JBS USA in an attempt to learn its immediate plans. All but a relative handful of the plant’s 2,200 workers have been temporarily laid off.

The cost of continuing to operate had become too difficult for the Nilsson Bros., who continued to pay employees for several weeks even after the plant’s licence to operate was suspended. In addition, the company has temporarily lost its privilege to export to the United States until an audit is conducted by the CFIA in conjunction with officials from the U.S. Food Safety Inspection Service.

The U.S. Department of Agriculture has estimated that about 2.5 million pounds of beef products that had been exported were recalled. But that is just a fraction of the amount that has been pulled from store shelves across Canada.

Sheri Monk, a reporter for Alberta Farmer with extensive knowledge of the cattle industry, said Thursday that 16 million pounds is the bare minimum of beef products that XL Foods would have recalled. The company ended up having to recall everything it produced over five days — and was slaughtering 4,000 animals each day, with each carcass weighing an average of 800 pounds.

In addition, she estimates that 12 to 15 million pounds of detained meat was still in the plant at the time it was shut down, much of which will likely be lost. Retailers may have also returned another 10 to 15 million pounds of other products to XL Foods that were manufactured around those same dates, Monk said.

Using an average price of $3 per pound — an amount that Grier said is plausible — the cost to XL Foods could range from a low of $48 million to a high of $135 million.

“That’s simply the value of the product lost,” Schroeder said. “But the value of the product is only a fraction of their cost. Other costs often times are at least as large, if not more.

“You would quickly find yourself in a bad financial situation.”

A bigger problem to the company — and for the industry as a whole — is a loss of confidence from consumers.

“Consumers respond adversely to recalls,” Schroeder said. “They don’t necessarily associate it with the company as much as the product, which in this case means they are reducing their consumption of beef.

“This is broader than XL Foods and it is broader than Canada-wide. It is causing consumers in the U.S. to pause and think twice and step away from the product a bit, too.

“From a trust perspective, when there has been a regulatory issue, it takes time. In that case, sometimes having a new company come in and take ownership can restore that trust faster than anything else.”

With files from Calgary Herald

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Twitter/martykej

© Copyright (c) The Edmonton Journal

By Matt McClure, Calgary Herald October 18, 2012

CALGARY — 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 news 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 Lakeside 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.

Federal Agriculture Minister Gerry Ritz said in an e-mailed statement that the move wouldn’t affect the timetable or requirements for reopening the plant.

“While this is a private business decision, Canadian consumers can be assured the Canadian Food Inspection Agency will enforce the same rigorous food safety standards at the Lakeside facility regardless of the management,” Ritz 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.

CFIA 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 JBS’s arrival on the scene was a positive development.

“I’m not normally in favour of foreign control and ownership, but the Nilsson brothers were in over their heads,” O’Halloran said.

“They can go back to running their ranches now and leave the operation of this plant to someone who knows what they’re doing.”

While the union boss estimates 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.”

Brooks Mayor Martin Shields hopes the plant reopens quickly to ensure as many temporary workers as possible stay in the city.

“One unknown to us at this point is the sense of what is the transition time,” he said. “Hopefully through our social agencies, through our food bank, we can keep things stable and get as many people back to work.”

About one in six people in the southeastern Alberta city work at the meat packing plant.

Cathy Housdorff, press secretary for provincial agriculture minister Verlyn Olson, said it’s a nothing but good news for Alberta farmers.

Housdorff said Olson was on the phone with many of the affected parties Wednesday night, trying to find out more about JBS.

“We don’t know much about them at this point, so that’s one of the reasons he would like to have a conversation with them,” she said.

David Chalak, board chairman with the Alberta Livestock and Meat Agency, said the JBS deal was a positive development.

“JBS has a great reputation and certainly have a very strong and significant experience in the processing industry, and their involvement will be seen on the whole as a positive,” he said.

“It certainly alleviates some of the uncertainties around how this plant will move forward if and when it was recertified.”

In Ottawa, the New Democrats said they would introduce a motion Thursday calling for the resignation of Agriculture Minister Gerry Ritz. They will also seek the reversal of cuts to CFIA’s budget and request 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 a facility in Calgary.

An investigation found shortcomings in the Brooks facility that included a clogged carcass washer and insufficient analysis of test results to ensure contaminated lots were being diverted.

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.

With files from Bryce Forbes, Calgary Herald.

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© Copyright (c) The Calgary Herald

By Keith Gerein, Edmonton Journal October 16, 2012

EDMONTON – Energy Minister Ken Hughes says he plans to release a major report on Alberta’s retail electricity market before the end of the year.

Hughes received the 390-page report in early September, but said he wants to make sure he and his department carefully review each of its 41 recommendations before letting the public see it. The release will include the government’s response to the report, which was conducted over the spring and summer by a task force known as the Retail Market Review Committee.

“The electricity industry is quite complex, and so we want to make sure we have a really good understanding of the recommendations before we bring it forward,” Hughes said Tuesday.

Hughes would not reveal any of the recommendations but hinted that at least some minor changes could be coming to the province’s deregulated market. The task force was commissioned before the spring election following outrage over a spike in power prices.

“This reflects a thoughtful look at the retail market and that’s a good thing,” Hughes said. “We have had it for more than a decade. It’s a good time to take a good, thoughtful look at it to see what’s working, and where there could be some improvements.”

But Liberal energy critic Kent Hehr said the minister has had plenty of time to review the document and should release it now.

“Minister Hughes might be a slow reader, but that report was in his hands on Sept. 5,” Hehr said in a statement. “By my math, that’s 41 days with a report that was said to have 41 recommendations. That’s ample time for a government department to read it over. At the very least they could let the rest of us take a look at it.”

Hehr noted a recent survey from Hydro-Quebec showed residents of Calgary and Edmonton pay some of the highest power prices in the country.

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© Copyright (c) The Edmonton Journal