December 17, 2003

Oakhurst, Monsanto settlement in the works...New leadership for Parmalat...Hershey Creamery Co. celebrates 110 years... Suprema stockholder suit in federal court...Costco sales gain 14% for quarter...Labor dispute ends in three states...Dairy People News...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

An out-of-court settlement is in the works between Portland, Maine's Oakhurst Dairy and Monsanto Corp. St. Louis-based Monsanto brought suit against Oakhurst earlier this year for labels that they claim deceptively suggest that Oakhurst's milk is safer than other milk because it doesn't contain artificial growth hormones. The two companies plan to meet this week to complete settlement discussions. While neither company has commented on how the case will be settled, Oakhurst issued a statement that said it will continue to publicize that its farmers don't use artificial growth hormones. The suit is receiving wide attention, and is featured in the Dec. 22 issue of Time magazine. (The Boston Globe)

Turnaround expert Enrico Bondi will take over the leadership of Italy's Parmalat Finanziaria SpA and plans to put together a restructuring plan for the financially troubled company by the end of January. Parmalat Chairman Calisto Tanzi resigned last week along with three board members. The resignations are the result of a liquidity crisis at the company; investors are concerned Parmalat lacks funds to service debts and meet a $400-million obligation to buy out minority investors (18.18% stake) in a Brazilian unit by year-end. The company is in talks to postpone the buyout for six months. Parmalat narrowly missed defaulting on a $185 million bond payment last week after missing a deadline; stock sales were suspended. Calisto Tanzi inherited his father's ham and salami company in 1961 and turned it into a business that sells milk products, desserts and fruit juices worth $7.6 billion a year in 30 countries. (Bloomberg Financial News; AFX European Focus)

Harrisburg, Pa.-based Hershey Creamery Co. celebrates its 110th anniversary in 2004. The self-distributing company has sales reach that includes more than 21,000 retail customers in 28 states. The Holder family has owned the company since the 1920s, when their business, Meyer Dairy Co. of Bethlehem, Pa., merged with Hershey Creamery. The family remains involved with the business: George Holder serves as president and Walter Holder and Thomas Holder as vice presidents. The ice cream company and its founder, Jacob N. Hershey, are in no way connected to Milton S. Hershey of the chocolate company fame, though both companies started in 1894 in Pennsylvania. (The Patriot-News-Harrisburg, Pa.)

A shareholder suit accusing former Suprema Specialties CEO Mark Cocchiola and CFO Steven Venechanos of duping investors via cheese sales fraud is scheduled for Jan. 8 arguments in U.S. District Court in Newark, N.J. The FBI continues its probe of the liquidated company, and a court-appointed bankruptcy trustee will release a full report on financial dealings next year. The stockholder suit claims Cocchiola and Venechanos oversaw fictitious transactions and benefited on sales of stock prior to the company's collapse shortly after its second IPO in November 2001 raised $41.5 million. Cocchiola sold shares worth at least $3.4 million and Venechanos sold shares worth $600,000. The suit claims Suprema filed false SEC reports inflating sales growth with phantom hard cheese purchases and sales. The suit additionally accuses four directors and several hired contractors of failing to protect shareholders. The company shut down completely in early March 2002 and its assets were sold. (The Record-Bergen County, N.J.)

CUSTOMER CLIPS

Issaquah, Wash.-based Costco Wholesale Corp. reports sales gains of 14% to $10.3 billion in the first quarter of fiscal 2004 ended Nov. 23, compared to $9.0 billion during the first quarter of fiscal 2003. Net income increased 10% to $160.2 million in the fiscal 2004 first quarter, from $145.7 million during the fiscal 2003 first quarter. Costco currently operates 429 warehouse club stores, including 317 in the United States and Puerto Rico; a new warehouse club unit is expected to open in Citrus Heights (Sacramento), Calif., by the end of this month. Costco also operates 62 stores in Canada, 23 in Mexico, 15 in the United Kingdom, five in Korea, four in Japan and three in Taiwan.

Supermarket labor disputes update: United Food and Commercial Workers at Kroger stores in West Virginia, Kentucky and Ohio ended a two-month dispute with the supermarket chain and ratified a new contract Thursday. Kroger will increase its annual health contribution by 10.5 percent, or $12 million; the 3,300 union employees will switch from an open insurance system to a Blue Cross/Blue Shield plan expected to provide discounts that should keep benefits unchanged. The dispute closed 44 stores; while three Ohio stores will not reopen, the other 41 stores opened Monday after re-stocking. Shoppers were greeted with free coffee, cookies and doughnuts. Meanwhile, nearly 4,000 Indiana Kroger workers continue to work without a new contract. (Associated Press)...In California, representatives of Safeway Inc. (Vons and Pavilions), The Kroger Co. (Ralphs) and Albertsons Inc. and the union resumed contract negotiations Friday under the direction of a federal mediator. Labor leaders including actress Melissa Gilbert, president of the Screen Actors Guild, and John J. Sweeney, president of the A.F.L.-C.I.O., marched through the streets of Beverly Hills Tuesday with several thousand UFCW grocery workers as part of a call for a future one-day boycott at Safeway stores nationally. (New York Times)

DAIRY PEOPLE NEWS

Kraft Foods Inc. co-CEO Betsy Holden has been reassigned to an unspecified global marketing position at Kraft. Co-CEO Roger Deromedi will continue as the sole head of the Northfield, Ill.-based company. Both Holden and Deromedi remain members of Kraft's board of directors. (Associated Press) Both Deromedi and Holden served as officers of NCI and IDFA a few years ago...Cary Frye, IDFA vice president of regulatory affairs, and Allen Sayler, IDFA director of regulatory affairs and international standards, were recently elected as Standing Committee chairs within the International Dairy Federation (IDF). Frye becomes the chair of the IDF Standing Committee on Food Labeling and Terminology, and Sayler becomes chair of the IDF Standing Committee of Food Additives...A Benedictine nun from Connecticut, Mother Noella Marcellino, received the French Food Spirit Award this week at the Senate in Paris. Organizers called her an "international expert" on cheese. The 52-year-old nun earned a doctorate in microbiology, studying cheeses made from unpasteurized milk on a Fulbright scholarship, and was profiled in a documentary that coined her nickname: "The Cheese Nun." (Associated Press)...In passing: Frank Guida, 78, former president of Guida's Milk and Ice Cream/Guida-Seibert Dairy Co. of New Britain, Conn., died last week. He retired from the company in 1990. (Hartford Courant-Connecticut)

IDFA NEWS

Register Now for 2004 Dairy Forum!
Don't miss the 2004 Dairy Forum, January 18-21, at the Boca Raton Resort and Club in Boca Raton, Fla. This annual event provides a unique opportunity for key players from all sectors of the dairy industry - processors, producers and suppliers - to discuss the most pressing issues facing the industry. Session topics will focus on strategies for driving market profitability, joint processor-producer efforts to increase dairy consumption, and the government's role in the market. In her first industry speech as president and CEO of IDFA, Connie Tipton will deliver the keynote address entitled "Risk Success...!" on Monday morning, January 19. Immediately following, there will be an in-depth discussion about issues and politics during an important election year with key congressional leaders. Make sure to reserve your spot now at this important conference! For more information, or to register, click here.
http://www.idfa.org/meetings/2004dairyforum.cfm

ODDS-AND-ENDS

Danone is boosting its investment in Turkey: the French company plans to acquire Nestlé's dairy business in Turkey, including its UHT milk business; in a separate transaction, Danone will acquire the 50 percent of its Turkish operations held by Turkey's Sabanci group. (AFX European Focus)...Woodbury, N.Y.-based East Side Entrees donated 6,500 cartons of its shelf-stable Shake n' Sip milk to be part of the holiday meals distributed by New York's Feed the Children's "Miracle on 138th Street" this week. The East Side Entrees products come in chocolate and vanilla flavors and use packaging from subsidiary ESE Dairies that includes Nickelodeon characters SpongeBob SquarePants, Jimmy Neutron and The Wild Thornberrys. The aseptic product was first launched in schools this year. The event is expected to deliver 175 tons of food to 5,000 Harlem families with the help of celebrities including SpongeBob SquarePants and members of the NBA...Informa PLC, a publicly held business information group in the UK, acquired global ag & food research firm Sparks Companies Inc. on Dec. 5. Informa's media group includes ag publications such as Agra Europe Dairy MarketsWeekly as well as conference hosting...Holiday Scheduling: D-brief will not be published Dec. 24; early edition Dec. 31.

STOCK MARKET TICKER

As of 12/16/03, 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		25.92 32.90 77.45 47.08 31.78 77.20 23.95 09.95 31.59 17.33 16.98 19.98 28.65 25.46 36.01 36.28 15.90 09.14		-0.07 +0.35 -0.04 +0.85 +0.44 -0.22 +0.02 +0.17 -0.24 +0.06 +0.28 +0.11 +0.60 -0.09 +0.59 +0.63 -0.02 +0.22		+0.42 +0.31 +0.17 +1.18 +0.73 +0.13 +0.04 -0.05 +0.19 +0.02 +0.17 +0.06 +0.67 -0.27 +0.82 +1.23 -0.68 -0.02
Source: Yahoo! Finance

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