BUSINESS WEEK ONLINE NEWS FLASH!
August 22, 1997


Edited by Douglas Harbrecht


TURNING UP THE HEAT ON HUDSON FOOD

The U.S. Agriculture Dept. has ordered the immediate closure of a Hudson Food Inc. meat processing plant in Columbus, Neb., that officials now say may have been the source of the largest amount of contaminated beef ever to make it to the consumer market.

Agriculture Secretary Dan Glickman says there's a possibility that some 25 million pounds of beef hamburger patties and other meat products made at the plant have been contaminated with a deadly strain of E. coli bacterium.

Recall of the beef products had already ballooned from 20,000 pounds on Aug. 12 to 1.2 million pounds on Aug. 15. All bear the number 13569. Agriculture says the plant won't resume operations until the company can prove it is handling the meat processed there in a safe manner.

The agency says it believes the E. coli contamination occurred from meat that was supplied to the Hudson plant and did not initially happen at the plant. Agriculture is checking the records of seven companies that could have supplied the tainted meat to the Nebraska plant.

Meanwhile, Hudson Foods is notifying all of its customers, which include Wal-Mart and its Sam's Club unit, Burger King, and Boston Market. Products produced at the Nebraska plant are the only Hudson Foods products involved in the recall. "We are doing our best to cooperate fully with the USDA and will continue to do so," says Hudson Foods Chairman James "Red" Hudson. "Hudson Foods is a quality company, and this is clearly the best action to take in the public's interest."

Still, as the amount of affected meat has skyrocketed, federal regulators are investigating whether Hudson purposely hid information about the extent of the contamination. Red Hudson, who founded the meat processing firm in 1972, says the Columbus facility accounted for $91 million, or about 6.6%, of the company's $1.4 billion fiscal 1996 sales.

By Stephanie Anderson Forest in Dallas

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