March 3, 2004

Kraft Latin American division finds new home in South Florida...Parmalat investigators look into Mafia ties...Wells' Dairy employees file complaint...Dean to close Madison Morningstar plant...California supermarkets call back workers...Domino's reports sales increases...Global Marketwatch...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

The headquarters of Kraft Foods' Latin American division will move from Rye Brook, N.Y., to Coral Gables, Fla. The move will transfer about 50 high-level executives, including Gustavo Abelenda, president of the Latin American division. The move is part of the Northfield, Ill.-based Kraft's reorganization plan announced earlier this year. Kraft will receive about $530,000 in state and county incentives to help establish the new headquarters location, which is expected to hire 50 support staff members in addition to transferred execs. (The Miami Herald)

Potential Mafia links are the latest twist in the international Parmalat Finanziaria SpA scandal, with 18 people arrested by Italian anti-Mafia investigators Tuesday. The suspects allegedly secured a monopoly on the sale of Parmalat products in the Naples area. Parmalat and Cirio, another Italian company under investigation, apparently paid kickbacks to local mobsters in exchange for a virtual monopoly in and around Naples. In other Parmalat news, Italian prosecutors in the fraud case have requested indictments by June, and investigators based in Parma and Milan are searching for money believed to be stashed in various offshore accounts. Lawyers for Deloitte, the dairy group's primary auditor since 1999, refused to allow magistrates to interview two partners at the firm who are under investigation. Instead, the partners issued a written statement that reiterated past statements denying allegations. (Financial Times)

Some employees at Wells' Dairy Inc. have filed an unfair labor practices complaint against the Le Mars, Iowa-based company. The National Labor Relations Board claim by the United Dairy Workers of Le Mars charges Wells' with changing employee incentives and holiday bonuses, and threatening bargaining representatives. The employees claim that between Aug. 29, 2003, and Feb. 20, 2004, Wells' violated its contract by cutting out employee-gain sharing incentives and reducing yearly Christmas bonuses by half; and implementing unilateral changes in the form of eight-hour shifts for some workers, reducing shift premiums and changing paid time off. Wells' said in a statement that the company has explained to employees that the changes were necessary to keep the company viable. (Associated Press)

Dallas-based Dean Foods Co. will close its Madison, Wis., Morningstar dairy plant June 5. Production will be moved to other facilities. Morningstar was purchased from the former Bancroft Dairy in 1988. The 110,000-sq.-ft. plant produces cottage cheese, sour cream, coffee creamers and whipping cream, with 90 million lbs. annual capacity. The approximately 100 plant employees will either receive severance packages or will be offered relocation opportunities. (The Capital Times, Madison, Wis.)

CUSTOMER CLIPS

The Southern California supermarket labor action has ended after four-and-a-half months. The United Food and Commercial Workers union agreed to new contract terms with Albertsons Inc., Kroger Co. and Safeway Inc., voting on the new contract Sunday. Thousands of temporary workers hired after the start of the Oct. 11 labor action have been released and union workers are heading back to the job. Specific details of the contract have not been released, but it includes the two elements sought by the supermarkets: a two-tier wage system for new employees and employee contributions to the cost of health insurance. Union sources said they protected pensions and ensured that health benefits remained affordable. Other regional supermarkets that have benefited from the labor action via increased customers expect a sales drop as the three chains focus efforts on recapturing their consumer bases. For instance, California supermarket Stater Bros., reported a first-quarter earnings jump to $34.6 million compared to $2.9 million during the same period in 2003; company officials predict that 90 percent of the customers gained during the strike will return to their neighborhood stores. (Associated Press)

Domino's Inc. reported that 2003 sales were up 5.8 percent system-wide from 2002. The Ann Arbor, Mich.-based pizza delivery chain also reported that fourth quarter sales rose 9.6 percent from the prior year. The company attributes the increases to a boost in worldwide same-store sales and store counts as well as a weaker U.S. dollar compared to previous years. Domestic same-store sales were up 1.3 percent compared to 2002. Domestic same-store sales rose 5.1 percent in the fourth quarter compared to the same 2002 period, which the company attributes to the introduction of its new Philly Cheese Steak Pizza. International same-store sales increased 4 percent over 2002 and rose 3.6 percent in the fourth quarter. Domino's added a net total of 197 stores in 2003 for a total of 7,427. Currently, domestic stores number 4,904 and international stores total 2,523. (Company report)

GLOBAL MARKETWATCH

French conglomerate Group Danone has sold its 10.1 percent stake in Australian dairy company National Foods Ltd., leaving New Zealand's Fonterra as the largest shareholder. The sale comes after National Foods announced it hoped to achieve double-digit full-year profit growth. The company also announced that it had interest in acquiring troubled Parmalat's Australian dairy interests. Parmalat could make a decision on the possible sale by April, said National Foods chief executive Peter Margin. (Sydney Morning Herald)

Russia's Wimm Bill Dann Foods has invested $4.9 million in extended shelf-life plastic bottle production for its Siberian Milk OJSC unit in Novosibirsk. The new ESL line provides 30-day shelf-life for fermented products, filling 0.9 liter and 0.45 liter bottles at a rate of 150 tons per and 90 tons a day, respectively. It will be used for milk, kefir, ryazhenka and drinking yogurt under the Chudo, Domik v Derevne, Bio Max and Neo brands. The investment also includes two blow-molding units. (Company report)

IDFA NEWS

Hotel Deadline is Monday for "Dairy 101" Workshop
If you haven't already, be sure to reserve your spot now for IDFA's popular Dairy 101: Milk Procurement Workshop on March 30-31 at the Embassy Suites O'Hare in Rosemont, Ill. This popular annual program is designed to provide the basics on milk pricing mechanisms, including the Federal Milk Marketing Order system, to industry newcomers and veterans alike. Hotel reservations must be made directly with the Embassy Suites O'Hare (847-678-4000) by March 8 in order to guarantee a room; be sure to mention "Dairy 101" to receive a special room rate. Then, click here to register for this program! http://www.idfa.org/meetings/2004dairy101.cfm

ODDS-AND-ENDS

Seattle-based WestFarm Foods and the Teamsters could not come to a new contract agreement on Tuesday. As a result, the Teamsters in Lynden, Wash., and Chehalis, Wash., will honor the planned extension of pickets by locked-out union members starting tonight. The lockout of 200 WestFarm workers began Aug. 31. (International Brotherhood of Teamsters)...A livestock feed-maker in Fort Collins, Colo., has sued Land O'Lakes over an animal feed brand name. The $133 million suit in federal court by Cache La Poudre Feeds LLC claims that Land O'Lakes illegally marketed Profile feed line, a name Fort Collins, Colo.-based Cache La Poudre said it began using 10 years earlier. Cache La Poudre has five employees and sales of less than $1 million annually. (Denver Post)

STOCK MARKET TICKER

As of 3/2/04, 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 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		27.44 36.36 78.50 47.04 34.63 82.84 11.16 34.00 19.07 19.75 22.77 29.81 28.54 41.65 32.97 19.25 06.07		+0.14 -0.50 +0.00 -0.15 -0.71 -1.11 +0.21 -0.22 -0.36 -0.55 -0.46 -0.14 -0.24 -1.15 +0.47 -0.01 -0.14		+0.77 +1.26 +0.22 +1.24 -0.12 -0.56 +0.06 +0.75 +0.05 -0.10 -0.47 -0.19 +0.09 -1.45 +0.34 +0.52 -0.60
Source: Yahoo! Finance

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