June 9, 2004

Saputo earnings rise 22.3 percent...Chinese kindergartners ill from suspect milk powder...Parmalat reveals outline to pay creditors...New York State continues crackdown on illegal dairy import sales...AgriMark considers promotional brand to support producers...Frozen Scoop...Kroger adds new concepts to Michigan marketplace...Wal-Mart expansion rolls on...Jewel-Osco labor negotiations...Odds-and-Ends...Stock Market Ticker...more news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Saputo Inc.'s net earnings jumped 22.3 percent to US$157.6 million in fiscal 2004 (ending March 31, 2004) compared to US$128.9 million in fiscal 2003. The Montreal-based cheese company posted sales of nearly US$2.7 billion for fiscal 2004 and growth of 5.1 percent compared to the prior year. Sales volume in the company's U.S. division grew 5.9 percent. As a result of strong fourth quarter results at Saputo's Argentina acquisition made in November, the company plans to invest nearly US$9.7 million to expand production and add equipment. In other news, 16-year Saputo veteran Carmine De Somma becomes the new president and chief operating officer of the company's international operations; he most recently served as senior vice president of international cheese sales and procurement. (Company report, Edmonton Journal-Alberta)

About 80 kindergartners at two schools in southwest China came down with food poisoning last week after consuming milk made with powder produced by Guiyang City Shanhua Milk Industry Company. Many of the children were hospitalized, with some severely dehydrated from repeated vomiting. The milk powder is being tested by health authorities, and government officials have suspended sales of the product. (Agence France Presse)

Sketchy details of plans to help scandal-ridden Parmalat Finanziaria SpA emerge from bankruptcy were outlined in a meeting held in Milan, Italy, with the Italian dairy company's bondholders and other creditors last week. An audit has placed the multi-national company's debt at about $18 billion. Preferential creditors, including suppliers, will receive full cash settlements, and unsecured creditors will receive shares. The company additionally reported its 2005 sales goal of $4.6 billion and projects $488 million in earnings for the same time period. (Associated Press)

In continuation of a crackdown on sales of illegal foreign dairy products in the state of New York, authorities have made a deal with 14 Brooklyn-based retailers and two distributors. The investigation began into sales of imported milk, butter, cheese and yogurt from France, Russia, Poland and Israel last year. The retailers were each fined $100, and the distributors were fined $25,000 and $5,000. In 2003, an additional 18 retailers and a distributor paid fines ranging from $100 to $7,500 and agreed to stop selling the illegal products. Products in question were sold without proper permits; in addition, product packaging lacked expiration dates and often did not include English language on-package. (Associated Press)

Brattleboro, Vt.-based AgriMark is considering development of a New England milk brand designed to offer New England producers more than $1 extra per hundredweight. The premium to producers would be funded by a special marketing program adding 25 to 30 cents to the retail cost of a gallon of milk. (Associated Press)

FROZEN SCOOP

A new line of ice cream and frozen yogurt options designed to appeal to the health-conscious is rolling out nationally under the Ben & Jerry's brand. Products include: Carb Karma in Half Baked, Chocolate and Vanilla Swiss Almond flavors with 2-5 grams of net carbs per serving; Splenda-sweetened No Sugar Added Ice Cream flavors of Strawberry and New York Super Fudge Chunk; Light Ice Cream in Vanilla, Chocolate Chip Cookie Dough and Chocolate Mint & Cookies varieties; and a reformulation of all Ben & Jerry's frozen yogurt flavors to contain 3 grams or less of fat per serving. Burlington, Vt.-based Ben & Jerry's Homemade Inc. is a subsidiary of Unilever. (Company report)

Caramel Popcorn ice cream is the latest feature flavor offering from Mayfield Dairy Farms. The 56-oz. carton is rolling out in grocery and convenience stores in the nine southeastern states served by the Athens, Tenn.-based Dean Foods subsidiary. (Company report)

Brenham, Texas-based Blue Bell Creameries has likewise entered the low-carb craze, with the recent addition of Splenda-sweetened vanilla, chocolate and Moo-lennium Crunch flavors to its ice cream product lines. In addition, the company will debut a cantaloupe and cream flavor ice cream in July as part of its rotating seasonal line-up. The product news was featured in a recent Associated Press article detailing the family-owned company's growth and its fans, including President George W. Bush. (Associated Press)

Minneapolis-based International Dairy Queen is introducing MooLatte™, a frozen blended coffee drink line. Mocha, cappuccino or French vanilla MooLatte flavors feature DQ soft serve frozen dessert, coffee, ice and a whipped topping garnish; the 16 oz. size beverage costs an average price of $2.99. The launch began this month; support will include a June 28 through July 18 national TV ad campaign as well as local market radio and print advertising. (Company report)

CUSTOMER CLIPS

A new Kroger Marketplace store format will debut in the metro Columbus, Ohio, market by year-end under direction of the The Kroger Co.'s Great Lakes Division. Three other stores are slated for 2005 openings. The full-service supermarket will include a pharmacy and expanded general merchandise including home & bath, office and other merchandise. The concept builds on the success of Kroger's Arizona stores under the Fry Marketplace banner (converted from 17 Fred Meyer Marketplace stores)...Kroger is also introducing a new "fresh fare" store format in the Detroit, Mich., market. The supermarkets target consumers with high disposable incomes, and feature expanded cheese selections as well as wide varieties of fresh produce, gourmet foods, wine, meat, seafood and convenience meals. Fresh fare stores were introduced in the Los Angeles market five years ago. Kroger plans to add eight more stores in Michigan by 2006; it currently has 123 stores in Michigan (including 72 in metro Detroit). (Company report, The Detroit News)...Earlier this week, Kroger reached a tentative agreement with 8,500 union members at 86 southeastern Michigan stores. The union's 3-year contract expired Saturday at midnight; the last round of contract negotiations in 2001 ended after United Food and Commercial Workers members voted to strike. (Detroit Free Press, Company report)

Wal-Mart will enter the Northeast Ohio market with five Supercenters expected to open within the next 18 months. Units will be located in Chardon, North Madison, Middlefield, Wadsworth and Oberlin. Earlier this month, Wal-Mart added a third Neighborhood Market to the Mesa, Ariz., market; the chain plans to add 13 additional stores, including both Supercenters and Sam's Club units, to the state. Overall, the Arkansas-based retailer plans to open 220 to 230 Supercenters and 25 to 30 Neighborhood Markets by next January. (The Cleveland Plain Dealer, The Arizona Republic)

The union for 4,100 meat cutters and delicatessen workers at Albertson's Inc.-owned Jewel-Osco has rejected what the supermarket chain said was its final contract proposal. In turn, Chicago-based Jewel has rescinded its offer of 10 months of retroactive pay. United Food and Commercial Workers Local 1546 officials described the offer as "awful," while company officials say it is the best wage/benefit package in the Chicagoland supermarket industry. Worker health insurance contributions and Sunday overtime shifts are a topic of debate. The union must give Jewel-Osco 10 days' notice if it intends to strike. (The Chicago Tribune)

The labor action in California earlier this year is behind a 79 percent drop in earnings to $36 million for the first fiscal quarter for Boise, Idaho-based Albertson's; sales were down 2.3 percent to $8.7 billion. The California dispute reduced quarterly sales by $386 million. (The Idaho Business Review)

IDFA NEWS

Washington Conference to Host Prominent Election Analyst
Which party will capture the White House and the balance of power in Congress this November? Find out the latest political happenings and predictions by attending this year's Washington Conference, set for June 23-24. One of the nation's top election analysts—Dr. Larry J. Sabato, founder and director of the University of Virginia's Center for Politics—is among the featured speakers on the conference program. In addition, IDFA will outline the DAIRY COUNTS IN 2004 program, a multi-pronged effort to ensure that the dairy foods industry makes a difference in the November elections. Register now for this important event, which is complimentary for members, by clicking here. http://www.idfa.org/meetings/washconf2004_agenda.cfm

ODDS-AND-ENDS

Production at the Madison, Wis., Dean Foods' Morningstar facility ceased on Saturday. Formerly Bancroft Dairy, the cottage cheese, sour cream and coffee creamer operation had been in business for 70-plus years. The planned closing was announced in February; production will be shifted to facilities closer to the dairy company's distribution centers in Texas, Florida and Virginia. Madison officials report that Dean is fielding several offers to purchase the facility. (Wisconsin State Journal-Madison, Wis.)...Sorrento Cheese will return as a presenting sponsor for the 15th Annual Sorrento Cheese Festa Pasta Vino (Italian food and wine festival) in Chicago later this month. The event features music, entertainers, contests, culinary demonstrations and samples of food, wine and Sorrento cheeses. (Company report)...Scientists in Taiwan have cloned four dairy cows with ear cells harvested from an adult Dutch dairy cow. The four healthy calves were born separately, with the first arrival on Dec. 11, 2003, and the three others on Jan. 16, Jan. 22, and Feb. 19, 2004. One of the calves was cloned in an American lab using frozen embryos, which were then shipped to Taiwan and implanted in the surrogate mother. A fifth calf was born with a cleft soft palate.(China Post)

STOCK MARKET TICKER

As of 6/8/04, 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		28.11 36.04 79.11 47.30 35.51 92.22 11.09 30.56 17.07 21.22 23.02 32.40 32.09 38.75 34.27 15.85 06.14		0.16 -0.13 +0.00 -0.05 -0.21 +2.42 +0.04 -0.08 +0.24 +0.14 +0.23 +0.40 +0.31 -0.20 -0.05 +0.14 -0.12		+0.17 +0.98 +0.02 +1.52 +1.07 +3.91 +0.17 +0.66 +0.50 +0.45 +0.40 -0.19 +1.15 +0.40 +0.17 -0.15 -0.19
Source: Yahoo! Finance

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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, Curwood and TIC Gums. Polytainers is a leader in the design, production and printing of thinwall rigid plastic containers for the dairy and food industries. Learn more about this sponsor at www.polytainersinc.com. Curwood develops and manufactures high-performance, high-barrier, polymer-based packaging materials. For more information about Curwood products, visit www.curwood.com. TIC Gums is America's oldest supplier of hydrocolloids to food, pharmaceutical, cosmetic and industrial companies worldwide. To learn more about this sponsor, visit www.ticgums.com.

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