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Company hurt by delay in expanding irradiation

THE BALTIMORE SUN

Tainted deli meat. Contaminated hamburger. Bacteria-laden cantaloupe.

Consumers might have thought the onslaught of deadly food scares this year would have sparked sales for SureBeam Corp., the nation's largest irradiation company. But the company has been caught in a difficult waiting game - and the losses are piling up.

The trouble for SureBeam is that it's depending on the federal government to approve wider use of its germ-zapping equipment by food processors and on retailers to embrace the controversial technology.

While it waited, its third-quarter business stalled. The San Diego company said last week that its loss widened in the three-month period that ended Sept. 30 to $11 million, or 16 cents a share, from $7.7 million, or 14 cents, a year earlier. Revenue fell more than 50 percent to $7 million from $14.5 million.

"We had thought initially that" SureBeam's irradiation technology would be more widely accepted "much sooner," said Leonard Teitelbaum of Merrill Lynch Global Securities.

Yesterday, Giant Food Inc. became the first food retailer in the Baltimore-Washington market to sell Surebeam irradiated ground beef.

Teitelbaum and other analysts say they expect the company to become profitable soon.

Last month, the U.S. Department of Agriculture approved use of irradiation on imported produce, and the company said it is completing negotiations to sell its equipment to a number of foreign fruit producers and countries, which could help generate about $40 million in annual revenue.

"The issuance of this rule is the first step in building an international business," said Larry Oberkfell, SureBeam's president and chief executive. "We are going to work hard to move SureBeam's business forward."

SureBeam also is expected to get a huge boost in the next few years if the Food and Drug Administration approves irradiation for use on a whole host of processed, precooked foods such as cold cuts and hot dogs. In addition, the USDA said recently that irradiation could be an option for participants in the federal school-lunch program to use on meat. However, the prospect of so much irradiated food coming to market has some microbiologists and consumer groups up in arms.

Irradiation kills pathogens, pests and food-spoilage microorganisms by exposing them to controlled levels of ionizing radiation, such as gamma rays, electrons or X-rays. The radiation passes through packaging, blasting germs and pests. It also delays mold and other spoilage, extending the shelf-life of fresh foods.

Although the federal government considers the technology safe, some microbiologists say there hasn't been enough independent research done to determine if the chemical byproducts created during irradiation are harmful.

Melinda Fulmer is a reporter for the Los Angeles Times, a Tribune Publishing newspaper.

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