Do you remember the pink slime dispute between Beef Products Inc., ABC, and ABC’s parent company, Disney? Earlier this year the dispute ended when Disney agreed to a $177 million litigation settlement, but the damage to Beef Products Inc. (BPI) had already been done, according to the company. According to the company, the lawsuit damaged its reputation and resulted in a drop in sales, plant closures, and layoffs. Fortunately, the recent settlement has allowed company owners to establish a “$10 million fund to benefit former BPI employees impacted by plant closures.”
Do you remember the pink slime dispute between Beef Products Inc., ABC, and ABC’s parent company, Disney? Earlier this year the dispute ended when Disney agreed to a $177 million litigation settlement, but the damage to Beef Products Inc. (BPI) had already been done, according to the company. According to the company, the lawsuit damaged its reputation and resulted in a drop in sales, plant closures, and layoffs. Fortunately, the recent settlement has allowed company owners to establish a “$10 million fund to benefit former BPI employees impacted by plant closures.”
But what happened in the first place? What was the lawsuit about? Well, for those who don’t know, BPI sued the networks for $2 billion back in May of 2012 after “correspondent Jim Avila reported that the beef company was mixing leaned, textured beef product into their meat.” He also “referred to the by-product as ‘pink slime,’ and suggested that BPI was adding it without informing customers on the labels.” The company decided to sue because it claimed the ‘pink slime’ label was harming their business.
Pink slime refers to “low-cost processed beef trimmings sold by Beef Products Inc.” The processed trimmings were at one time a “popular ingredient in ground beef and were found in McDonald’s and Burger King hamburgers and in grocery chains and schools” all over the country.
Shortly after Avila’s segment aired to the public, ABC took it upon itself to investigate the matter and how pink slime was being used in ground beef. During the investigation, Gerald Zirnstein, a former Agriculture Department scientist, called the trimmings “a cheap substitute,” and said that “allowing them to be sold as ground beef amounted to an economic fraud.”
Once the network concluded its investigation, it aired its report on television, which, according to BPI, “created a consumer backlash with a devastating impact on its bottom line.” The company also argued that “the segment and several subsequent reports were rife with inaccuracies.” Additionally, representatives of the beef company claimed they had to “close three plants and lay off 700 workers because of the pink slime backlash.”
Now that the $10 million fund has been established, the company hopes that it will help any employees “who were laid off when sales dropped” because of the reports aired by ABC News. In total, the reports caused the company to have to lay off an estimated 750 employees, and facilities throughout Kansas, Iowa, and Texas were closed down.
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