Management of XL Foods, the Alberta-based meat packer at the heart of a widespread beef recall, has unexpectedly been taken over by an arm of a Brazilian food-processing giant.
JBS USA, in a news release issued from its headquarters in Greeley, Colo., said the deal also provides the company with an exclusive option to buy XL Foods’ Canadian and U.S. operation.
“We believe our experienced team will prove an invaluable asset in the management of XL Lakeside and we look forward to exploring our options to purchase XL assets in the near future,” said Bill Rupp, president and chief operating officer of the wholly owned subsidiary of Brazil-based JBS S.A.
It was a surprising development in an already dramatic saga and was followed a few hours later by a report on CTV News that the Canadian Food Inspection Agency had been warned repeatedly by U.S. authorities from 2003 to 2008 about food safety shortcomings at XL Foods.
It was the Canadian Food Inspection Agency that ordered the XL Foods plant in Brooks — one of Canada’s largest beef processors — closed over E. coli contamination
CTV also said documents obtained from the U.S. Department of Agriculture, which regularly audits meat plants in Canada, show that XL Foods was frequently “de-listed” — it lost its certification to export its products to the U.S.
XL Foods did not respond to media requests for comment on these U.S. documents.
However, Brian Nilsson, co-CEO of XL Foods, did issue a brief news release Wednesday, giving more details on the deal with JBS USA. It said that JBS, if it exercises the option to buy XL Foods’ assets, would pay $50 million (U.S.) in cash and $50 million in JBS S.A. shares.
But, it said, “under no scenario will JBS USA assume any of XL Foods’ debt or liabilities.”
Earlier Wednesday, Brooks Mayor Martin Shields said the community has been in turmoil over the troubles at XL Foods. Workers at the plant, who had been recalled back to work Monday so that CFIA inspectors could finish their review, were laid off again Wednesday.
“The workers completed the job. They are now laid off again. We are waiting on the CFIA to decide when the plant can reopen,” said Doug O’Halloran, president of the United Food and Commercial Workers union. “I think the earliest we are looking at now is Friday or maybe Monday.”
The agency said it expected to complete a report and make a recommendation to the federal government about the plant before the beginning of next week.
The CFIA said its review in the coming days will include how well the XL Foods is handling E. coli controls, meat hygiene, sampling techniques and overall sanitation.
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