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Atkins impact in pasta plunge.

The Atkins diet is causing companies to shrink as well.

America's biggest pasta maker, American Italian Pasta Co., said recently it will fire 14% of its workforce and close a factory because consumers are giving up pasta for lowcarb regimens like the Atkins and South Beach diets.

Shares in the company, which makes Mueller's pasta, plunged 3.8%, shedding $21.5 million in shareholder value.

Although the company tried earlier this year to market a low-carb pasta, customers wouldn't buy it, said CEO Tim Webster. The firm will shut its Kenosha, Wis., plant and fire 100 of its 720 workers.

American Italian Pasta is just the latest victim of the low-carb craze.

Doughnut giant Krispy Kreme blamed low-carb diets for disappointing first-quarter sales, but the explanation didn't stop angry shareholders from suing Krispy Kreme last week for failing to see the low-carb craze coming, among other issues.

Potato chip maker Jays Foods was pushed into bankruptcy court three months ago after the Atkins diet eroded sales by more than 10%, officials said.

The potato chip firm was gobbled up in a courtroom fire sale by fund Willis Stein & Co. for $26 million.

But the new owners promptly sued Atkins and its low-carb snack food subsidiary for trademark infringement over an Atkins chip called Crunchers, which allegedly infringes on Jays' popular Krunchers! brand of chips.

America's biggest food maker, Kraft, says it also has lost sales over carb counters.

Kraft began fighting back earlier this month by signing a deal to put the popular South Beach Diet trademark on some of its lowcarb products, which will be disclosed later this year.

Pastry and cake-baker Tasty Baking is also suffering from the carb-free craze, its cash flow has plunged 26% percent in the past year.

Tasty Baking aims to get even in mid July by rolling out its own new line of pies, cakes, doughnuts and bakery items with no sugar and half the amount of carbs.

More than 24 million American adults are following low-carb diets like those pioneered by the late Dr. Robert Atkins and his rival, Dr. Arthur Agatston, whose low-carb "South Beach Diet" book has sold more than 11 million copies.
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Author:Tharp, Paul
Publication:Frozen Food Digest
Geographic Code:1USA
Date:Jul 1, 2004
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