A10 Economy & Business


S


KLMNO eggs from A1


TUESDAY, AUGUST 24, 2010


Recall comes at time of consolidation in egg industry Egg recall


JUSTIN SULLIVAN/GETTY IMAGES


3Par, based in Fremont, Calif., makes software that maximizes data storage space. Hewlett-Packard has bid $1.5 billion for the company.


HP seeks to outbid Dell for data storage firm 3Par


By Andrew Vanacore Hewlett-Packard is bidding


$1.5 billion for data storage pro- vider 3Par, offering 33 percent more than what rival Dell agreed to pay for the company just a week earlier. The tussle for control of 3Par comes as both HP and Dell have been looking to expand beyond personal computers in search of bigger profits. The companies say they both want to provide prod- ucts for organizing data on cor- porate servers. Those tools could help either company go deeper into “cloud computing,” the growing practice of offering soft- ware on a subscription basis over the Internet. The offer announced Monday


raised questions about the direc- tion HP is taking since Mark Hurd was forced to resign as chief executive earlier this month. Hurd was pushed out for filing inaccurate expense reports for dinners and other outings with a former HP marketing con- tractor. Asked why HP only made an


offer for 3Par after Dell jumped in last week with its $1.13 billion bid, company executives declined to say exactly how long they have been considering the deal or whether Hurd had been in favor of it.


HP executive vice president


Dave Donatelli indicated that HP had made a previous offer but would go only as far as saying, “We’ve been working on this deal for some time.” HP’s bid of $24 a


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share represents a 33 percent in- crease over Dell’s offer last Mon- day of $18 a share, which itself had been an 87 percent premium over 3Par’s most recent closing price at the time. Including debt, HP valued its offer at roughly $1.6 billion. In trading Monday, shares of


3Par jumped $8.05, or 44.6 per- cent, to close at $26.09. The fact that it closed above HP’s offer price suggests that investors ex- pect Dell to make a higher coun- teroffer. Dell spokesman David Frink declined to comment on the company’s next move. HP shares slipped 81 cents, or


2 percent, to $39.04. Shares of Dell, which is based in Round Rock, Texas, fell 13 cents, or 1.1 percent, to $11.94. HP, based in Palo Alto, Calif., is the world’s biggest computer maker, with Dell trailing at No. 2. But HP has gone further than Dell in stretching beyond the PC market. PC sales made up less than a third of HP’s annual rev- enue of $116 billion during the most recent fiscal year, while they account for more than half of rev- enue at Dell. With the acquisition of 3Par, which is based in Fremont, Calif., HP would add to a data storage business that generates about 13 percent of its revenue. The software 3Par offers is de- signed to maximize available space on data storage hardware — a cost-cutting step — by using a technique called “thin provision- ing,” by which extra capacity can be added as needed. — Associated Press


calls are likely as investigators wade through invoices and try to piece together where the affected eggs have ended up. “A few large manufacturers send product to wholesalers and distributors who repackage and sell it under other brand names,” said Jeff Farrar, the FDA’s associ- ate commissioner for food pro- tection, who said it can take days or weeks to figure out where tainted food has been sold. “Wright County Egg would sell large volumes of eggs to their cus- tomers, some of whom would package these eggs under differ- ent brand names or sell bulk eggs to their customers, who may re- package under different names.” As in the beef and hog in- dustries, the consolidation of the egg business has been driven by economies of scale, said Dan Ot- to, an economics professor at Iowa State University. Iowa, with its abundant corn, can supply cheap feed to egg companies. The companies have created massive campuses that include hatcheries, egg-laying fa- cilities and multiple processing plants, where some eggs are bro- ken and pumped as liquid into tanker trucks, while others are packaged whole for the wholesale or retail markets. As the mega-producers have


developed during the past 20 years, they have gone largely un- regulated by government agen- cies responsible for making sure food is safe. The Food and Drug Adminis-


tration, which has responsibility for the safety of whole eggs, had not inspected the two Iowa-based facilities at the heart of the mas- sive recall that began 10 days ago. Nor had the U.S. Department of Agriculture or the Iowa Depart- ment of Agriculture and Land Stewardship. In the case of Wright County Egg, the company had a history of labor and envi- ronmental infractions, including one that stemmed from workers handling manure and dead chick- ens with bare hands. “It is shocking that nobody was in these facilities, but it also illus- trates that egg-laying facilities have fallen into the crack be- tween the government agencies that are responsible for food safe- ty,” said Caroline Smith DeWaal, director of food safety at the Cen-


A salmonella outbreak triggered a recall of eggs aſter hundreds of people fell ill. To check and see whether the eggs in your refrigerator have been recalled, look at the brand, the plant number and the Julian date and see if, together, they are on the following list:


Codes stamped on one end of egg carton Plant number Brand


Albertson Albertson Albertson Albertson Bayview


Boomsma’s Boomsma’s Boomsma’s Boomsma’s Country Eggs Country Eggs Dutch Farms Farm Fresh Farm Fresh Farm Fresh Farm Fresh Glenview Glenview Hillandale


James Farms James Farms Kemps Kemps Kemps


SELL BY SEP 07 2010 P-1946 223 ∆


Plant number Julian dates 1413 1026 1720 1942 1686 1413 1946 1720 1942 1026 1946 1946 1026 1946 1720 1942 1720 1942 1413 1720 1942 1946 1720 1942


SOURCE: U.S. Food and Drug Administration


ter for Science in the Public Inter- est, an advocacy group.


Although it has broad author-


ity to regulate the production of food, the FDA historically has in- spected egg-laying facilities only if it suspected contamination, said Farrar. That is likely to change under a new agency rule that took effect in July. And food safety legislation pending on Capitol Hill would require the FDA to routinely inspect high- risk food facilities, including hen- houses. Under a long-standing regula-


To the Right Things


tory divide, the USDA regulates the health of the chickens, not the eggs they produce. The agency has visited the producers at the heart of the outbreak, but only to grade the quality of their eggs as part of a voluntary program, ac- cording to USDA spokesman Ca- leb Weaver. Quality graders visit packaging facilities, not laying houses, Weaver said. And while some states inspect farms and egg-laying facilities — and several conduct vigorous in- spection programs — Iowa, the leading egg-producing state, does not, said Dustin Vande Hoef, spokesman for the state’s agricul- ture department . “Clearly this is a tragic situation, but two federal agencies have been given the re- sponsibility to ensure food safety and we count on them in that re- gard,” Vande Hoef wrote in an e-mail. Under legislation that has passed in the House and is expec- ted to be taken up by the Senate in September, the FDA would be required to visit Wright County Egg and other similar producers annually. It would have access to internal company documents that show results of microbial


ORLIN WAGNER/ASSOCIATED PRESS


A sign at a grocery store in Lawrence, Kan., assures customers that the eggs for sale were not included in the recall and are safe to eat.


testing and the company would be required to adopt a strategy to prevent contamination and prove that it follows the strategy. The bill also would require compa- nies to keep uniform distribution records, making it easier and faster for the FDA to track con- taminated food. “This is a patchwork of govern- ment programs where everyone can point to someone else who they thought was doing the job,” DeWaal said. “This debate over who regulates the hens and the eggs has been going on for 20 years. The bottom line is, these laying houses should be regulat- ed.”


Salmonella enteritidis infec- tions can cause nausea, vomiting, abdominal pain, diarrhea and fe- ver. The illness can be briefly se- vere but is rarely life-threatening. In people with depressed im- mune systems, such as AIDS pa- tients, however, salmonella can cause fatal bloodstream infec-


tions. No deaths have been re- ported in the ongoing national investigation but the Centers for Disease Control and Prevention thinks that tainted eggs have sickened at least 1,300 people since May. On Monday, the House Energy and Commerce Committee launched an investigation into the tainted eggs. Farrar said that about 20 FDA microbiologists and inspectors have been dis- patched to the two Iowa plants. So far, microbial testing has not confirmed the presence of Salmo- nella enteritidis in either facility, but the agency is awaiting the re- sults of further tests, he said. If anything were to slow or re- verse the consolidation of the egg industry, it would be a massive, costly recall, said economist Otto. “This might do it.” laytonl@washpost.com


Staff writer Rob Stein contributed to this report.


Plant Julian date


136 through 225 136 through 225 136 through 229 136 through 229 142 through 149 136 through 225 136 through 225 136 through 229 136 through 229


216 through 221 (15-dozen bulk) 216 through 221 (15-dozen bulk) 136 through 225 136 through 225 136 through 225 136 through 229 136 through 229 136 through 229 136 through 229 136 through 225 136 through 229 136 through 229 136 through 225 136 through 229 136 through 229


1413 1026 1946 1946


Julian


Brand number dates Lucerne Lucerne Lucerne Lund Lund Lund


Mountain Dairy 1951 Mountain Dairy 1413 Mountain Dairy 1026


1091 1951


136 through 225 136 through 225 136 through 225 136 through 225


1720 136 through 229 1942


136 through 229 193 through 208 136 through 225 136 through 225


Mountain Dairy 1720 136 through 229 Mountain Dairy 1942 Nulaid Nulaid


Pacific Coast Pacific Coast Ralph’s Ralph’s Ralph’s


Shoreland


136 through 229 167 through 174 195 through 210


1720 136 through 229 1942 1413 1026


1720 136 through 229 1026


Sunny Farms 1860 Sunny Farms 1663 Sunny Meadows 1860 Sunny Meadows 1663 Sunshine Sun Valley Trafficanda


1413 1951 1413


136 through 229 136 through 225 136 through 225


136 through 225 099 through 230 137 through 230 099 through 230 137 through 230 136 through 225 195 through 209 136 through 225


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