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    Home »  News »  Business

    Brazilian company buys XL Foods plant involved in E. coli meat recall last year

    Cattle in pasture beside XL Foods' Lakeside Packers plant at Brooks, Alberta on Monday, Oct. 1st, 2012, 2012. The XL Foods meat packing plant that was at the centre of the largest meat recall in Canadian history has been acquired by the subsidiary of a Brazilian company. THE CANADIAN PRESS/Larry MacDougal

    CALGARY - The Alberta meat-packing plant that was at the centre of the largest meat recall in Canadian history has been acquired by the subsidiary of a Brazilian company.

    JBS South America says its Canadian division, JBS Food Canada, expects to complete the purchase of the XL operations in Brooks, Alta., on Monday.

    JBS USA took over management of the XL Foods facility in October when an E. coli bacteria outbreak led to the massive meat recall with an option to buy.

    "Today JBS officially enters the Canadian beef market through our acquisition of the XL Lakeside beef-packing plant," said Bill Rupp, president and COO of JBS USA Beef in a statement.

    "After several months of careful consideration of the option and nearly three months of successfully managing the Lakeside facility, we have determined that the Canadian operations will serve as an important asset to our strategic global beef production model."

    Under the terms of the agreement, JBS Food Canada will acquire the Lakeside plant in Brooks, a beef-packing plant in Calgary, a feedlot in Brooks and the adjacent farmland acreage supporting the feedlot operation.

    Under no scenario will JBS assume any of XL Foods' debt or liabilities.

    It was early September when U.S. food inspectors found E. coli bacteria in a shipment of beef from the XL Foods plant in Brooks, Alta.

    The U.S. quickly closed its border to beef from the plant, which slaughters up to 40 per cent of Canada's cattle. Canadian officials then shut the plant down and sent 2,200 workers home.

    In the weeks that followed, the Canadian Food Inspection Agency pulled back more than 2,000 products across the country involving millions of kilograms of beef the largest meat recall in Canada's history.

    American food safety regulators announced a similar recall by XL Foods of its products in more than 30 states.

    There were 18 confirmed cases of people getting sick in Canada from a specific and potentially deadly strain of E. coli linked to the XL Foods beef and a civil lawsuit is pending.

    Last month the Alberta government approved an exemption to its Foreign Ownership of Lands Regulation for the JBS acquisition, saying that the purchase was considered an economic benefit to the province.

    The Brooks plant has the capacity to process up to 4,000 cattle per day.

    XL Foods also agreed to give the U.S. subsidiary of JBS an option to acquire its U.S. operations, pending regulatory approval south of the border.

    Word that the deal had been finalized was welcomed in Brooks, a small thriving farming community about 200 kilometres east of Calgary.

    "It's done and that's good," said Brooks Mayor Martin Shields.

    "Stability is the word I would use. Everybody knew the offer was out there. Everybody knew they had been running the plant so a lot of people just assumed it was all done. But the announcement really does make things stable."

    Alberta Agriculture Minister Verlyn Olson said he was pleased by the development.

    "This is very good news for Alberta and Canadian beef producers, the employees of the plant, the community of Brooks and the owners and operators of XL Foods Inc.," said Olson. "This purchase is the next and very important step in what has been a very long process."

    Documents obtained under Freedom of Information showed that XL Foods management had been warned by Canadian Food Inspection Agency staff about the conditions of the plan six times before the outbreak.

    Inspectors issued the six warnings from January to September 2012, when the plant was closed.


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