AFA Foods Announces Bankruptcy
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PRESS RELEASE - AFA Foods Enters Bankruptcy
AFA Foods, a company that produces beef products, filed for Chapter 11 bankruptcy protection today and announced it’s selling some assets because of a decrease in demand attributed to the recent media coverage of “pink slime.”
The company, based in King of Prussia, Pa., said it secured $56 million in financing to continue operating during the bankruptcy process.
AFA Foods, which according to Bloomberg employs about 850 full-time employees, said in a press release that the media’s reporting on “pink slime” has created “changes in the market.”
Beef Products Inc., one of AFA’s competitors, has also experienced a dramatic decline in sales and closed three of its four plants last week.
Until recently, the lean finely textured beef, known to critics as “pink slime,” was added to America’s fast food, school lunches and 70 percent of all ground beef sold at grocery stores.
Due to consumer complaints following recent media reports several fast-food chains and many of the nation’s largest grocery chains have stopped purchasing beef that contains the filler. The U.S. Department of Agriculture also announced that schools that are part of the government’s lunch program will be able to choose whether they purchase lean finely textured beef.