April 7, 2004

Eight groups interested in Parmalat holdings...Marquez Brothers expands plant...Dreyer's consolidates offices...Silhouette Brands launches Skinny Cow in UK...New dairy distribution...Penn Traffic extends financing...Eagle Food Centers sells last store...Farmer Jack launches Food Basics...Global Marketwatch...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Eight groups have expressed interest in acquiring assets of Parmalat Finanziaria SpA. A Canadian bank analyst said Saputo Inc. is among the interested parties. Speculation also centered on other Canadian companies Agropur, Neilson Dairy and McCain Foods. While Parmalat has said it wants to maintain its Canadian operations, it might be forced to sell off some non-core brands. In Brazil, a court-appointed board of directors is determining which of Parmalat Brasil's assets to sell as part of a plan to restructure $2.5 billion in debt. The board is also readying for a five-year audit of Parmalat Brasil's books to determine if it contributed to the parent company's $18 billion accounting hole. In New York, U.S. Sen. Charles Schumer asked the Justice Department to watch over any deal Parmalat makes for its milk-bottling plants in the area. The senator worries that certain buyers would obtain a virtual monopoly on milk production in the region, leading to higher milk prices. (National Post; Associated Press)

Marquez Brothers International, the San Jose, Calif.-based makers of El Mexicano cheese, meat and grocery products, will invest $18 million in an 85,000-square-foot addition to its Hanford, Calif., Hispanic cheese plant. The facility will produce cheese and process whey. The expansion will add roughly 60 employees. The current plant, launched in 1994, manufactures six styles of Hispanic cheeses and processes about 25 million pounds of milk each month. (The Fresno Bee)

Dreyer's Grand Ice Cream Holdings will consolidate the recently acquired Nestlé's ice cream business with its Oakland, Calif.-based corporate operations. Dreyer's will close the former Nestlé office in San Ramon; employees will move to the downtown Oakland office center Dreyer's is leasing. (Alameda Times-Star, Alameda, Calif.)

Silhouette Brands, New York, N.Y., reports the launch of its Skinny Cow brand of lowfat ice cream in the United Kingdom. Sales have exceeded expectations at the Asda Wal-Mart, the sole distributor for the nine-month test period. Plans call for a nationwide rollout in October. Silhouette agreed to license the brand to Richmond Ice Cream Ltd., the UK's top ice cream manufacturer. (Company report)

CUSTOMER CLIPS

A new sales outlet for dairy products is growing. Dollar stores and other deep-discount retailers have increasingly broadened their offerings to include dairy products. Some chains, such as 99 Cents Only stores in California and other western states, accept products with shorter shelf-lives than supermarkets, which allows for prices in the dollar range. The no-frills stores, which number 16,000 nationwide, generate $16 billion a year and are the fastest-growing segment in retail. Housewares, brand-name items and dairy products help these stores attract new customers, particularly those beyond their traditional low-income clientele. (Los Angeles Times)

Bankrupt grocery chain Penn Traffic Co., Syracuse, N.Y., received an extension on a financing package that will allow it to continue operations through Feb. 25, 2005; U.S. Bankruptcy Court must approve the plan. Penn Traffic runs 110 supermarkets in New York, Pennsylvania, Vermont and New Hampshire as well as a wholesale food distribution business with 75 franchises and 40 independent operators. The company has until April 29 to file its reorganization plan, though it can request an extension from the court. It has been granted extensions twice before. (Associated Press)

Eagle Food Centers has sold off its last store. Labor problems and aggressive competition stymied the Milan, Ill.-based supermarket chain's efforts to emerge from its second round of bankruptcy protection in four years. Eagle's 61 stores were sold individually to 15 competitors including Albertsons, Boise, Idaho; and Hy-Vee Inc. in West Des Moines, Iowa. When the company filed for bankruptcy in April 2003, it had $180 million in assets and $177 million in liabilities. Initially, the company sought to restructure but quickly started searching for buyers. (Daily Deal)

In an effort to turn around slumping sales, Detroit-based Farmer Jack Supermarkets has opened 10 discount grocery stores under the name Food Basics. The company closed Farmer Jack stores in eight Detroit-area communities in January. They reopened as Food Basics stores March 30. This conversion begins a restructuring plan for the grocery chain. Food Basics will carry perishable food and pantry products but only those the chain can offer at a discount. Selection is limited. Food Basics stores operate in New York, New Jersey, Philadelphia and Ontario. (Detroit News)

GLOBAL MARKETWATCH

Denmark-based dairy company Arla Foods is under investigation for using its leading market position to unfairly dominate sales. The Danish Competition Authority acted on a complaint from Hirtshals Co-op Dairy. Hirtshals felt it had been pushed out of the Dansk Supermarket chain by losing contracts to Arla, which Hirtshals alleges had used its size to offer prices below market value. Arla boasts a market share of more than 90 percent for most dairy products. In the United Kingdom, Arla's UK subsidiary will close its Lancashire dairy, cutting 310 jobs. Arla Foods UK Plc. will also shut down its bottling operation in Essex. (Associated Press)

Russian juice and dairy processor Wimm-Bill-Dann Foods started a $21.2 million juice line that boasts a capacity of 20,000 bottles an hour. The new line will produce and package juices, nectars and new products under the J-7 brand. Sales volume of Wimm-Bill-Dann's dairy products, juices and mineral water totaled almost 1.5 million tons in 2003. (Russian Business Monitor)

IDFA NEWS

Registration Opens for New Dairy Cost Accounting Workshop
Recognizing the growing importance of cost accountants in overall company management, IDFA has fully redesigned this year's Dairy Cost Accounting Workshop, scheduled for May 25-26 at the Sofitel Chicago O'Hare in Rosemont, Ill. The 2004 Dairy Cost Accounting Workshop will continue to present the solid cost accounting and route distribution analysis found at past programs, but will also incorporate new sessions about key strategic issues and efficiencies. For complete information or to register, click here. http://www.idfa.org/meetings/2004dairycostacct.cfm

ODDS-AND-ENDS

French dairy processor Groupe Danone joined with Argentine candy manufacturer Arcor to form the largest cookie company in South America. The as-yet-unnamed company is expected to produce as much as 255,000 tons of cookies. Danone also reported having increased sales of its dairy products in Russia by 34 percent last year compared to 2002. (Associated Press)...The March 12 fire at a Superior Dairy plant in Perry Township, Ohio, was started by sparks emitted from a metal-cutting saw and welding tools. A lack of supervision contributed to the spread of the blaze —another worker armed with a fire extinguisher was supposed to watch for sparks. (Associated Press)...An American was stopped by customs officials at London's Heathrow Airport after trying to smuggle more than 220 pounds of cheese and poultry into the country. Allen Blumenberg of New York, N.Y., was found to have more than 26 pounds of dairy products (mostly cheese) and nearly 214 pounds of raw chicken and turkey in cardboard boxes. (Press Association Ltd.)

STOCK MARKET TICKER

As of 4/06/04, 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		27.90 33.85 78.81 46.82 33.44 84.02 11.45 31.80 16.93 20.95 21.34 33.70 30.07 39.84 34.16 19.97 07.71		+1.06 +0.41 -0.17 +0.27 +0.45 +1.22 +0.93 +0.09 +0.50 +0.48 +0.86 +1.40 +0.70 -0.04 +0.95 +1.10 +0.20		+0.30 -0.18 -0.14 +0.16 +0.37 +1.23 +0.11 -0.40 +0.18 +0.04 +0.39 -0.35 -0.12 +0.21 +0.62 -0.01 +0.20
Source: Yahoo! Finance

Click here to view last week's edition of D-brief.
http://www.idfa.org/dbrief/archive.cfm

ABOUT D-BRIEF

D-brief is written by Dairy Field magazine, a Stagnito Communications Inc. publication, www.dairyfield.com. It is provided for the benefit of the industry by the International Dairy Foods Association (IDFA), www.idfa.org.

D-brief is sponsored by Polytainers, a leader in the design, production and printing of thinwall rigid plastic containers for the dairy and food industries. Learn more about our sponsor at www.polytainersinc.com.

For editorial content submissions, contact Cathy Sivak, D-brief editor, at editor@dbrief.org.

To subscribe or unsubscribe to this e-newsletter, send your request -- along with your full name, title, company, phone and email address -- to subscribe@dbrief.org.