February 18, 2004

Dreyer's purchases Häagen-Dazs Shoppe Co...Dean Foods' financial report...Prairie Farms acquires Michigan dairy distributor...Additional arrests in Parmalat probe include members of Tanzi's family...Dairy People News...Ahold's Bi-Lo and Bruno's up for sale... Kroger debuts new store format in Utah...Supermarket labor negotiations continue...IDFA News...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Oakland, Calif.-based Dreyer's Grand Ice Cream Inc., purchased the Häagen-Dazs Shoppe Co. Inc. franchise business from General Mills Inc., Minneapolis. Dreyer's reports the purchase includes all 236 U.S. Häagen-Dazs ice cream shop franchises. All U.S. manufacturing and marketing of Häagen-Dazs ice cream will now fall under the Dreyer's umbrella. When it combined with Nestlé Ice Cream Co. LLC in June 2003, Dreyer's received the brand license and ice cream supply contract for the scoop shop chain. Each shop will continue to be independently owned and operated by franchisees. (Company report)

Acquisitions, higher retail price points and increased volume led to a 37 percent increase in fourth quarter profit by Dean Foods. Co. The Dallas-based company reports a net income of $86.5 million (54 cents a share) for the quarter ending Dec. 31, 2003, compared with $63.1 million (42 cents a share) in the fourth quarter of 2002. Fourth quarter 2003 sales grew 12 percent to $2.5 billion, compared to $2.2 billion in the same 2002 period. As anticipated, supermarket strikes in California hurt Dean's operating income by about $4 million during the quarter. Dean's total 2003 net income more than doubled to $355.7 million ($2.27 a share), compared to $175.4 million ($1.21 a share) in 2002. Sales for 2003 grew 2.1 percent to $9.18 billion from $8.99 billion in 2002. (Company report, Associated Press)

Carlinville, Ill.-based Prairie Farms Dairy Co. has acquired Tom Davis & Sons Dairy Co., Oak Park, Mich. The previous owners - Davis family members Gary, Tom, Jim, Rick and Mary Cay Davis-Robosan - will continue to manage the 50-truck operation, which now distributes Prairie Farms dairy products to 1,500 customers in southeast Michigan (60 percent retail, 40 percent foodservice). Prairie Farms has added 150 employees in processing and distribution to the existing staff of 75, and has opened a new fluid milk plant in Battle Creek, Mich. Prairie Farms currently holds about 76 percent of all retail dairy sales in Michigan. (The Detroit News)

The son, daughter and brother of jailed Parmalat Finanziaria SpA founder Calisto Tanzi were among eight additional arrests made Tuesday in connection with the ongoing probe of Italy's Parmalat. Stefano Tanzi (a member of the Parmalat board and its former marketing director) and Francesca Tanzi (heads Parmatour, a family-owned travel and holiday business established in 2003) were each arrested on suspicion of criminal conspiracy, fraudulent bankruptcy and with providing false corporate information. Giovanni Tanzi, the founder's brother and a Parmalat board member, was also arrested. Up to 50 people are under investigation by Italian prosecutors. Meanwhile, the Mexican Parmalat unit is negotiating to unfreeze its local Banamex bank accounts, which the company reports is putting a viable operation at risk. Banamex, Mexico's second-largest bank, is owned by Citigroup, which is embroiled in the accounting scandal. (Agence France Presse, Associated Press)

DAIRY PEOPLE NEWS

With profits on the rise, Unilever chairman Niall FitzGerald will retire Sept. 30, 2004, after 37 years with the multi-national company. FitzGerald joined the company in 1967 and has most recently served as chairman (eight years) and as director (18 years). Unilever posted a 21 percent rise in profits to 4.9 billion euros in 2003. Patrick Cescau, foods director, will take over FitzGerald's position following his retirement. (Daily Post-Liverpool)...Joseph Pichler, chairman of the board for The Kroger Co., will retire from Kroger on June 24, 2004, the date of the company's annual shareholders meeting. As previously announced, the board plans to elect David Dillon, Kroger's CEO, to the additional position of chairman upon Pichler's retirement. Pichler served as chairman and CEO from 1990 until 2003, when Dillon was appointed CEO. (Company report)...Jim Greisinger, president of Dean Specialty Foods Group, retired Feb. 1; Blake Anderson, formerly senior vice president of marketing for Dean Specialty Foods Group, has taken over as president of the division. (Company report)...In passing: G. Robert ''Bob'' Sumner, 81, died Feb. 3 in Akron, Ohio. An Eagle Scout, he received a dairy technology degree from Ohio State University in 1952, went to work for Borden's Ice Cream in Pittsburgh and then returned to Akron in 1960 as a plant manager for Reiter & Harter Dairy. He retired in 1978 from Reiter Dairy. (Akron Beacon Journal-Ohio)

CUSTOMER CLIPS

Dutch retailer Ahold is putting its Mauldin, S.C.-based Bi-Lo (292 stores in the Carolinas, Georgia and Tennessee) and Birmingham, Ala.-based Bruno's (178 stores in Alabama, Florida, Georgia and Mississippi) retail divisions on the market. Ahold hopes to sell both chains in a single transaction by the end of 2004 to help the company pay down its debt as well as to focus on other U.S. retail units. In addition, a U.S. foodservice distribution center in South Winsdor, Conn., will close Feb. 20. The facility was originally expected to shut down in November 2003, but the union representing about 80 of the workers was able to delay the closing. The center has 100 employees. The company has similar facilities in Norwich, Boston, Peabody, Mass., and Albany, N.Y. Meanwhile, two of Ahold's seven supervisory board members will depart. Ahold remains under investigation by the SEC and the Dutch counterpart for a $1 billion accounting scandal. (The State-Columbia, S.C., Associated Press, Hartford Courant-Connecticut)

Smith's Marketplace, a new store format from The Kroger Co., will debut in Utah this June. The stores will feature full-service grocery, pharmacy and a full selection of general merchandise. Five of Kroger's Utah Fred Meyer stores will be converted into Smith's Marketplace units for more than $7.5 million. The remaining three Fred Meyer stores in Utah will close, as will a Fred Meyer regional office in Salt Lake City. Smith's Food & Drug currently operates 126 stores in seven states and will have 50 in Utah following the conversion; Fred Meyer will have 130 stores in Oregon, Washington, Idaho and Alaska (where a new store in Palmer opens March 3). (Company report, Associated Press)

Labor action: Today marks the eighth straight day of federally mediated negotiations between Safeway Inc. (Vons and Pavilions), The Kroger Co. (Ralphs) and Albertsons Inc. and the United Food and Commercial Workers Union. The negotiations are the lengthiest since the strike/lockout began Oct. 11, 2003. (Los Angeles Times)...The three chains combined are believed to have lost about $1.5 billion in sales since the strike began. Safeway reports the strike accounted for $103 million of total fourth-quarter losses of $696 million. Strike-related losses from its Vons and Pavilions units average about $2 million a day (about 16 percent of its 1,817 total stores are involved). (Los Angeles Times)...Negotiators for more than 40,000 Stop & Shop union workers in Connecticut, Massachusetts and Rhode Island hammered out a new contract agreement in Sunday's early morning hours; a strike vote by the 40,000 union members was expected later in the day. Union members must ratify the contract before it becomes official. The 220-store, Quincy, Mass.-based chain is owned by Ahold. (Associated Press)

IDFA NEWS

Hotel Deadline is This Friday for SmartMarketing 2004
If you're looking to learn about the latest trends and developments in dairy marketing - particularly dairy's connection to weight loss - be sure to reserve your spot now for SmartMarketing 2004, set for March 16-18 in New Orleans! SmartMarketing 2004 is the first in-depth look at how dairy processors can leverage their own brands with the research that demonstrates dairy calcium's role in weight loss and weight management. Other sessions include the growing foodservice sector, school milk opportunities and maximizing processors' media dollars. Hotel reservations must be made directly with the Astor Crowne Plaza (888-487-9644) by this Friday, February 20, in order to guarantee a room; be sure to mention SmartMarketing 2004 to receive a special room rate. Then, click here to register for this exciting program! http://www.idfa.org/meetings/smartmktg2004_agenda.cfm

ODDS-AND-ENDS

Sen. Norm Coleman (R-MN) and Sen. Herb Kohl (D-WI) plan to introduce bipartisan legislation to extend the Milk Income Loss Compensation (MILC) program first authorized under the 2002 Farm Bill. The MILC program offers price support to all producers regardless of location and is set to expire Sept. 30, 2005; other safety net programs under the Farm Bill remain in effect through 2007. (Office of Sen. Norm Coleman)...Wilcox Dairy Farms LLC, Roy, Wash., has received a $5.9 million fluid milk and dairy products contract from the U.S. Department of Defense. Under the one-year contract, Wilcox will supply various commissaries located in the state of Washington until Feb. 14, 2005. (U.S. Department of Defense)...Devastating floods in New Zealand have virtually shut down the dairy industry in parts of the country. In one near-tragedy, a dairy farmer and the herd of 350 cows she was attempting to move to higher ground for milking were swept away by a flooded river. The 43-year-old woman managed to grab hold of Cow No. 569, which carried them both to solid ground. All but 17 of the 350 cows survived as well. (The New Zealand Herald)

STOCK MARKET TICKER

As of 2/17/04, market close.

Company/Symbol		Last Trade		Change over Previous Close		Change over Last Week's D-brief
ConAgra Foods/CAG Dean Foods/DF Dreyer's/DRYR General Mills/GIS Groupe Danone/DA Hershey Foods/HSY Horizon Organic/HCOW Ingles Markets/IMKTA Kraft Foods/KFT Kroger/KR Ruddick Corp./RDK Safeway/SWY Saputo/SAP.TO SuperValu/SVU Unilever PLC/UL Weis Markets/WMK Wimm Bill Dann/WBD Winn-Dixie/WIN		26.54 34.16 78.39 44.89 35.63 79.65 24.00 11.02 33.69 18.91 20.44 22.48 31.00 29.18 42.71 33.39 18.95 06.67		+0.38 -0.03 +0.05 +0.05 +1.04 +0.76 +0.05 +0.07 +0.75 +0.00 +0.87 +0.05 +0.80 -0.04 +0.43 +0.34 +0.80 +0.10		+0.43 +1.18 +0.09 -0.17 +0.35 +1.27 +0.00 +0.40 +0.67 +0.01 +0.44 +0.58 +1.10 +0.20 +2.47 +0.14 +1.37 -0.09
Source: Yahoo! Finance

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