Canada's XL Foods plant in limbo over tainted beef

TORONTO Sun Oct 14, 2012 2:09pm EDT

TORONTO Oct 14 (Reuters) - Production at the plant responsible for one of the biggest beef recalls in Canadian history remains in limbo after the operator announced it was laying off 2,000 workers and the federal regulatory agency said it could not complete its safety assessment.

XL Foods was given the green light to resume beef production at its Brooks, Alberta plant last Thursday under the close inspection of the Canadian Food Inspection Agency, or CFIA, after a massive recall of beef suspected of being tainted with the E. coli bacteria.

But on Saturday XL Foods said it was temporarily laying off most of its staff, prompting the CFIA to say it could not continue to assess the plant's operations because the cutting of carcasses had stopped.

"Unfortunately, the company decided to stop operations after only cutting about half the carcasses," CFIA said in a statement late Saturday. "At this time, we are unable to complete our assessment."

The CFIA suspended the plant's operating license on Sept. 27, after a recall of millions of pounds of beef suspected of being contaminated with E. coli bacteria. At least 12 people in Canada are recovering from eating meat contaminated with the bacteria.

Doug O'Halloran, president of the plant's local union, said it was a "stupid move" by XL Foods to layoff workers and called on the company to explain its actions.

"So it doesn't make sense why they would lay these workers off if CFIA says that they need to see more processing," O'Halloran, president of United Food and Commercial Workers Local 401, told CTV News on Sunday.

Millions of pounds of beef have been recalled across Canada and the United States, hitting food stores such as Wal-Mart Stores Inc, Costco Wholesale Corp, Safeway and Loblaw Companies Ltd. Some of the tainted beef also reached Hong Kong.

Both the plant's operators and the Canadian food inspection system have come under withering attack from Canadian opposition leaders and consumers for being slow to contain the crisis that they believe should also have been prevented.

CFIA has criticized the privately-held company for not following its own plan to ensure the safety of the beef it produces.

XL Foods said in a statement last week that it has addressed the problems raised by federal regulators, such as the need for better analysis detecting E. coli and improved record-keeping and monitoring.

But the plant's union said the culture at the plant needed to change to make food and worker safety the highest priority. The high speed production lines were "a serious problem," along with sloppy practices such as in the sterilizing of knives, the union said.

As the plant shutdown drags on, Western Canadian ranchers and feedlots were holding back cattle from the market, incurring extra costs. Some Canadian ranchers were shipping cattle to slaughter houses in Nebraska, Utah and Washington.

Canada is the world's sixth-largest exporter of beef and veal.