March 10, 2004

Parmalat secures loan, plans to sell Canadian properties...Land O'Lakes elects new chairman...Dietz & Watson buys Yancey's...Yakult and Group Danone form strategic alliance...U.S. executives blamed for Ahold scandal...Winn-Dixie investors file suit...Marketing Mix...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

A $128 million U.S. loan will help maintain operations at the headquarters of scandal-plagued Parmalat Finanziaria SpA. The fraud investigation has revealed that Parmalat units posted a loss of $435 million rather than the $377 million pre-tax profit previously reported. While the loan is expected to keep Parmalat SpA going for the next year, the company is expected to sell off its Canadian operations.

In other Parmalat news, Swiss officials blocked bank accounts related to the Italian fraud investigation into the company...In Chile, producers set a March 10 deadline for Parmalat to pay its $3 million in debt or milk delivery will be suspended...In the United States, the Securities and Exchange Commission has filed a lawsuit against Parmalat. Officials are probing the company to find out what role U.S. banks might have played in the scandal...U.S. law firms have filed class-action lawsuits against Parmalat founder Calisto Tanzi and other officials. An Italian consumer group, Altroconsumo, said Italian stockholders will join the U.S. lawsuits, as no such legal recourse exists in Italy. To date, more than 6,000 requests for assistance have been received from Parmalat investors, the group said. (Associated Press)

Arden Hills, Minn.-based Land O'Lakes board of directors has elected Pete Kappelman as its chairman for 2004. Kappelman, a Wisconsin dairy producer, has served on the Land O'Lakes board since 1996 and as the board's first vice chairman for the past five years. He becomes the ninth board chairman in the 83-year history of the company. Kappelman owns Meadow Brook Farms, Two Rivers, Wis., along with his brother, John. Kappelman was a founding member and the first president of the Professional Dairy Producers of Wisconsin. (Company report)

Philadelphia-based premium deli meat and cheese purveyor Dietz & Watson is investing in artisan cheese with its purchase of Yancey's Fancy Inc. The Corfu, N.Y.-based Yancey's facility produces more than 25 types of hand crafted cheeses, claims it is the largest fresh cheese curd processor on the East Coast and distributes to more than 35 states. John Yancey, president of the cheese concern, will continue to run the business under the new parent company. (Company report)

Japan's dairy-product giant Kabushiki Kaisha Yakult Honsha Co. Ltd and France's Groupe Danone have settled issues related to Danone's recent takeover attempt. The two have formed a strategic alliance to create a Global Probiotics Council to promote probiotics with interest groups such as consumers, regulatory authorities and the scientific community. Danone is the largest Yakult stockholder, with 20 percent of shares. The agreement puts further Danone purchase of Yakult equity on hold for five years and restricts Danone from purchasing effective majority control until 2014. (Dow Jones)

Low-Carb Ice Cream Entries: LeMars, Iowa-based Wells' Dairy Inc. is rolling out a full line of Blue Bunny Carb Freedom™ frozen dairy desserts and novelties. The line has earned the Good Housekeeping Seal...Athens, Tenn.-based Mayfield Dairy Farms is rolling out Vanilla, Chocolate, Butter Pecan and Neapolitan flavors of Mayfield Less Carbs™ ice cream in the Southeast this month. More flavors are expected to be added this fall...Salisbury, N.C.-based Food Lion adds three new low-carb flavors to its store brand line of Healthy Delight ice cream; each serving has only 3 to 4 net grams of carbs. (Company reports)

CUSTOMER CLIPS

Dutch food retailer Royal Ahold NV announced it will hold three former U.S. Foodservice executives responsible for damages related to inflating earnings for three years. Most of the earnings inflation (up to $1 billion) is attributed to U.S. Foodservice, Ahold's U.S.-based food distribution unit. The retailer will try to recover bonuses paid to former executives Mark Kaiser and Tim Lee, who were fired last year, and Jim Miller, who ran the unit until May. (Bloomberg News; Associated Press)

A Pittsburgh law firm has filed a class action lawsuit against Winn-Dixie Stores Inc., Jacksonville, Fla. The suit claims that the food retailer misrepresented the company's financial condition to investors. Earlier this year, Winn-Dixie's stock plunged after the company suspended dividend payments indefinitely. The company had reassured investors just days before that the dividends would be paid. In other news, Bennett L. Nussbaum was named the new chief financial officer of Winn-Dixie. He had previously served as CFO of Burger King. He replaces Richard P. McCook, who resigned after 20 years. (Business Wire; Associated Press)

A woman who claims her family ate ground beef linked to the lone case of mad cow disease documented in the United States has sued the supermarket chain that allegedly sold it to her. The suit was filed against Bellevue, Wash.-based Quality Food Centers Inc., a chain owned by Kroger Co., Cincinnati, Ohio. The lawsuit, filed on behalf of 52-year-old Jill Crowson, claims QFC did not pull the tainted meat off its shelves until the day after the bovine spongiform encephalopathy was detected. (Associated Press)

MARKETING MIX

St. Paul, Minn.-based Old Home Foods is making strides in a competitive local market with its marketing campaigns for women, specifically mothers. Focusing on billboards and drive-time radio, the advertising taps women during their "transitional point" - on their way home from work, just before they prepare dinner. Old Home, a family owned company, competes with Minneapolis-based Kemps; Land O'Lakes cooperative in Arden Hills, Minn.; and the French multinational company Dannon. A Chicago market research firm ranked Old Home first locally in cottage cheese (with more than 40 percent of the market), sour cream, dips and yogurt drinks. (Minneapolis Star-Tribune)

The latest celebrity to sign on with the National Milk Mustache "got milk?" Campaign is singer Fefe Dobson. Her milk mustache made its debut in the March 5 edition of Teen People. Her hit single "Everything" comes from her self-titled debut album. Meanwhile, the second year of the national "3-A-Day of Dairy" program kicked off with Dairy Week, March 3-9. The American Dairy Association and National Dairy Council sponsor the 3-A-Day program. A 42-million circulation newspaper insert on Feb. 29 announced offers from Kraft, Kemps, Darigold, Heluva Good cheese brands and others, as well as ADA's "Look for the Logo" sweepstakes.

IDFA NEWS

Register Now for IDFA's Plant Operations Conference
Registration is now open for IDFA's Plant Operations Conference, scheduled for May 4-5 at the Wyndham Chicago. This year's program will focus on critical facets of plant management: the regulations that dictate plant operations and the technologies that provide opportunities for efficiencies and product development. The conference addresses the issues that dairy plant operators handle on a daily basis, from labeling their products to integrating new technologies to dealing with labor disputes. For complete agenda and registration information, click here. http://www.idfa.org/meetings/2004plantop.cfm

ODDS-AND-ENDS

Quality control processes at Mainland Products Ltd. of New Zealand have been tightened after a customer found a photograph floating inside a bottle of Meadow Fresh Milk. Someone had used the back of a photo to write a milk token order. (Southland Times, New Zealand)...C&S Wholesale Grocers Inc., Brattleboro, Vt., the country's second-largest grocery wholesaler, plans to close a recently acquired Massachusetts warehouse on April 4. C&S purchased the warehouse in September. The shutdown will cut 375 jobs, most of them unionized. Operations will likely relocate to non-union facilities outside Massachusetts. A C&S spokesman said the 375,000-square-foot facility and a sister facility in Rhode Island were too expensive to operate (The Boston Globe)...The board of directors of the National Milk Producers Federation, Arlington, Va., voted to continue the Cooperatives Working Together (CWT) supply management plan through June 2005. CWT will again conduct a herd retirement program and the export assistance bid program; the reduced production marketing program was not renewed. (Dairy Herd)... In passing: William Conway, founder of New York's Mister Softee ice cream truck franchise, died Feb. 27 at the age of 81. At one time the truck fleet—with trademarked Mister Softee jingle and "conehead"—numbered more than 2,000 in 38 states, Puerto Rico, Canada and England. (New York Sun)

STOCK MARKET TICKER

As of 3/9/04, 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		27.76 35.98 78.83 47.58 34.05 84.00 11.00 34.50 18.56 19.77 21.70 31.45 28.48 41.65 33.29 19.06 07.30		+0.37 +0.15 +0.03 +0.17 -0.21 +0.55 +0.06 +0.29 -0.35 +0.18 -0.41 +0.22 -0.03 -0.07 +0.24 -0.05 +0.66		+0.32 -0.38 +0.33 +0.54 -0.58 +1.16 -0.16 +0.50 -0.51 +0.02 -1.07 +1.64 -0.06 +0.00 +0.32 -0.19 +1.23
Source: Yahoo! Finance

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