(Or how E Coli brings down a top meat processing company who doesn't practise safe manufacturing practices and not too overly concerned about where the source of meat they get from)
After Extensive Beef Recall, Topps Goes Out of Business
http://www.nytimes.com/2007/10/06/us/06topps.html
By KEN BELSON and KAREEM FAHIM
Published: October 6, 2007
Topps Meat Company could not recover after pulling back more than 21.7 million pounds of ground beef products in one of the largest meat recalls in recent years.
Workers leaving the Topps Meat plant in Elizabeth, N.J., on Friday. The company, which opened in 1940, went out of business shortly after it issued a recall that expanded to 21.7 million pounds of ground beef.
In a statement, Anthony D’Urso, the chief operating officer at Topps, in Elizabeth, N.J., said that the company “cannot overcome the reality of a recall this large.”
He added, “This has been a shocking and sobering experience for everyone.”
Executives at Topps, which made frozen hamburgers and other meat products for supermarkets and mass merchandisers, declined to discuss how and why the company collapsed so quickly, or whether they could have taken steps earlier to protect consumers or to head off the plant’s closure.
But Amanda Eamich, a spokeswoman for the United States Department of Agriculture, said yesterday that on Thursday the department had served Topps with a “notice of intended enforcement,” a move just short of suspending the rest of the company’s meat production. Topps had stopped producing ground meat as of Sept. 26, but had continued to produce meat products like steaks.
Ms. Eamich said the agency had taken the action because of “inadequate process controls” in the company’s non-ground meat production line.
Agriculture Department officials have acknowledged that they knew that meat from Topps was contaminated on Sept. 7, when the first positive test results for E. coli came back, but that they waited for confirming tests before ordering a recall 18 days later. On Sept. 8, the department informed Topps that its hamburgers were suspected in a case of E. coli poisoning in Florida and requested samples from the plant for testing, officials at the agency said.
The Topps recall came less than a year after Taco Bell was hit by an E. coli scare after diners in several states fell ill, and it has renewed concerns about the safety of the nation’s food supply. Topps is not the first meat company to close after a recall. A Hudson Foods plant in Nebraska shut down in August 1997 after an even larger recall, of 25 million pounds of ground beef, and agreed to be bought by Tyson Foods within a month.
The initial recall of 331,582 pounds of Topps’ frozen hamburger patties was announced on Sept. 25, by which time nearly 30 people had fallen ill in eight states. On Sept. 29, the company issued a much broader recall. Health officials say the first reported case of sickness linked to the O157:H7 strain of E. coli found in the Topps meat occurred on July 5, when an 18-year-old girl in central Pennsylvania fell ill. Three days later, a case was reported in New Jersey. Other cases were reported in Connecticut, Maine, Florida, Indiana, Ohio and New York.
Yesterday, health officials in Minnesota announced that four children had been sickened by E. coli in meat bought at Sam’s Club stores in August and September. Two of the children developed hemolytic uremic syndrome, a kind of kidney failure, and were hospitalized.
The company said a few of its 87 employees would remain at its plant in Elizabeth to help the Agriculture Department investigate how the bacteria might have tainted the frozen hamburger patties made there.
Yesterday, garage doors at the company’s plant were shut, and the window blinds were pulled down. Some workers inside peeked out. Officials held a barbecue where Topps hamburgers were cooked well done, according to Evelyn Hidalgo, a human resources manager. The hamburgers were “delicious,” she said, adding that workers toasted the company as they munched on them.
Workers, who were told of the closing in the company’s boardroom, then trickled out of the plant.
“It was very emotional,” said Vivian Quinones, a customer service worker for two years. Hugging her co-worker Maria Frometa in the parking lot before leaving, Ms. Quinones said the news came “out of the blue. Everyone was somber.”
Elmer Suero left not long after. A member of the United Food and Commercial Workers Local 342-50, Mr. Suero had moved with the company when it shut its factory on 38th Street in Manhattan and reopened in Elizabeth.
“The problem is the beef, not the company,” said Mr. Suero, wearing a white hard hat. “Topps has been in business a long time.”
Topps now must contend with at least one lawsuit, filed on Oct. 1 by Robert and Catherine McDonald of Colonie, N.Y., whose 8-year-old daughter, Emily, got stomach cramps, a fever and diarrhea after eating a hamburger made with Topps ground beef on Aug. 17. Tests later determined that E. coli was to blame. Their daughter spent three days in the hospital. The family is trying to recoup its medical expenses.
The company and a number of retailers have also been hit with a class action suit.
Even without the legal challenges, Topps would have faced a tough road back. Many of its customers are likely to seek other sources of beef. Unlike at more diversified food companies, meat processing was Topps’s main business, which means it had little revenue from other sources.
“It’s one of the problems for a single plant, small or large,” said John Nalivka, the president of Sterling Marketing, a consultant to the meat and livestock industry. “If you have a recall and that plant is down, your whole financial well-being suffers.”
The speed of the events also gave Topps little room to maneuver, particularly if it had to pay to recover its tainted beef from its customers, an expense that could take years to recoup from an insurance company.
“Recalls used to be rolling waves hitting the beach, and now they are tsunamis that choke off the oxygen,” said Gene Grabowski, who runs the crisis and litigation practice at Levick Strategic Communications and has handled more than 120 recalls. “This is not a giant and not diversified, so when a tsunami hits, it doesn’t have much of a chance.”
Topps opened in 1940 in Manhattan. The founder, Benjamin Sachs, later sold the company to his son, Steven Sachs, according to Ann Sachs, the founder’s former daughter-in-law. A few years before the company moved to New Jersey, Joseph D’Urso became vice president.
After Mr. D’Urso died in 2003, the company was bought by Strategic Investment and Holdings, a large investment firm in Buffalo that has stakes in dozens of companies. The firm declined to answer any questions.
In 2005, an inspection report by the Agriculture Department found that the plant had received processed meat tainted with E. coli. Inspectors found that a supplier had sent 10 bins of the meat to Topps, which had started to process it before being notified about the contamination.
Also in 2005, Topps settled a $1.7 million case with a 59-year-old maintenance man whose arm was amputated in an industrial processor. The same year, a 9-year-old girl sued the company after she became ill from eating a Topps hamburger.
According to industry experts, the size of the Topps recall was probably related to the company’s practice of “carrying over” meat from one day’s production to the next, without giving the older meat a separate batch number. The practice is not in itself illegal or unsafe, the experts said, but in the event of a problem, like an identified case of E. coli, the mixing of several days’ production makes it harder for officials to know the extent of the contamination.
Michele Williams, a spokeswoman for Topps, declined to comment on whether Topps carries over meat without giving it a separate batch number. But Ms. Eamich, the Agriculture Department spokeswoman, said the company did carry over beef.
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