ConAgra Implicated Again in Mislabeling of Exported Beef.

LOS ANGELES--(BUSINESS WIRE)--Aug. 25, 1999--

South Korean government investigators have discovered more mislabeled beef in another shipment of ConAgra's Monfort brand beef to the Livestock Products Marketing Organization (LPMO), the South Korean Government agency which purchases foreign beef.

According to Korean press reports, the LPMO stated that its contract with ConAgra required "Choice" grade. However, the shipment is suspected to be "No grade" meat with "Choice" labels. If the product is found to be a lesser grade, the LPMO will seek monetary damages and a permanent ban on government purchases of beef products from ConAgra's Monfort U.S. brand. Korea is one of ConAgra's largest markets for the export of beef products, and the LPMO one of the largest buyers.

Mislabeling was discovered on 324 tons of beef products, which are being held by the South Korean government pending further investigation. Last month, the LPMO issued a purchasing ban against Monfort U.S., after allegations earlier this year of altered USDA certificates on a 313 ton February shipment of Monfort brand beef. Those alleged alterations also involved labeling beef shipments from "No Grade" to the more preferable and more expensive "Choice" grade. The USDA is presently conducting an ongoing investigation into the earlier allegations.

In the February mislabeling incident, ConAgra attempted to shift the blame to its exporters, and used the alterations as an excuse for terminating its contracts with its exporters, which led to a federal lawsuit in Los Angeles. However, the latest discovery, which was widely reported Tuesday in Korea, occurred on a shipment from Monfort U.S. directly to the LPMO, with no involvement whatsoever of ConAgra's exporters.

In a federal civil court lawsuit filed in the Central District of California, one of the ConAgra's major exporters to Korea, PT Prime Trading Corp., has charged that ConAgra engaged in a pattern and practice of altering USDA certificates without authorization since 1991. According to the Complaint, USDA certificates were altered by "whiting out" entries and retyping amended information. The alleged alterations included changes to grade, net weight, box count, slaughter date and shipping mark. PT Prime charges that ConAgra falsely accused it of the alterations in order to conceal its own wrongdoing, and as a pretext for canceling PT Prime's contracts. PT Prime is seeking $15 million in contract losses as well as punitive damages.

Under the Federal Meat Inspection Act, 21 U.S.C. Section 601, et seq., once a USDA certificate is signed, no modifications or alterations of the information on the USDA certificate are permitted without the express written authorization of a USDA inspector. Violation of any provision of the Federal Meat Inspection Act with the intent to defraud is a felony. 21 U.S.C. (delta) 676.