‘Pink Slime’ Meat Slithers out of Stores

by InvestorPlace Staff | March 26, 2012 9:57 am

The so-called “pink-slime” meat fallout continued over the weekend, as major chains BJ’s Wholesale Club and Giant Food Stores LLC announced plans to remove the ammonia-treated meat from their shelves.

BJ’s and Giant are just the latest in growing line of food stores that have distanced themselves from the product. Wegmans Food Markets, headquartered in Rochester, N.Y., along with Supervalue (NYSE:SVU[1]), Food Lion and Safeway (NYSE:SWY[2]) announced last week the will no longer carry the beef product because of customer concerns.

Kroger (NYSE:KR[3]), the largest “traditional” grocery store chain in the U.S., and Stop & Shop, a subsidiary of Dutch company Royal Ahold (PINK:AHONY[4]) announced last Thursday they will stop buying the product.

All eyes at this point are on Wal-Mart (NYSE:WMT[5]), and their Sam’s Club and Walmart, who indicated that no decision has been made on ending the sale of pink-slime beef to this point.

In addition to the major supermarket chains, McDonald’s no longer carries meat produced with pink-slime, announcing in January[6] an end to selling the product in their ubiquitous stores throughout the country.

“Pink-slime,” or boneless lean beef trimmings (BLBT), is a low-cost ingredient in meat products made for the fatty meat trimmings left over from other cuts of meat. These small bits are heated and spun to remove the excess fat. The remaining lean meat is pressed into blocks and incorporated into other cuts of ground meat. The product is eventually exposed to ammonium hydroxide gasses to kill bacteria.

Eleven of the top grocery chains and suppliers provided statements to ABC News [7]detailing their decision on selling the product and how they will proceed going forward.

The next big question is at what point the U.S. Government may step in, particularly with regard to the availability of the product in school lunches throughout national school lunch programs. To this point, the U.S. Department of Agriculture has not made any formal pronouncements other than to say that starting in 2013, national lunch programs will have the option of avoiding the product.

– Marc Bastow, InvestorPlace Assistant Editor

Endnotes:
  1. SVU: http://studio-5.financialcontent.com/investplace/quote?Symbol=SVU
  2. SWY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SWY
  3. KR: http://studio-5.financialcontent.com/investplace/quote?Symbol=KR
  4. AHONY: http://studio-5.financialcontent.com/investplace/quote?Symbol=AHONY
  5. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  6. announcing in January: http://investorplace.com/2012/01/mcdonalds-cuts-pink-slime-off-menu-will-it-cut-profits/
  7. ABC News : http://abcnews.go.com/blogs/headlines/2012/03/where-to-get-pink-slime-free-beef/

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