On June 12, the Canadian food processing giant announced the creation of Canada Packers Inc. had been overwhelmingly approved at its annual meeting.

The Toronto Stock Exchange-listed company said shareholders also re-elected all board directors.

The spin-off vote required approval from two-thirds of all shareholders and a simple majority of public shareholders. It passed with 99.94 per cent support from all shareholders and 99.88 per cent from public shareholders, excluding McCain family holdings, a company release said.

‘Ready to unlock its potential’

Curtis Frank, president and chief executive officer of Maple Leaf Foods, said the shareholders’ endorsement of the move marks an important milestone in what he describes a one of the most transformational transactions in the company’s history.

“By creating two companies, each with its own robust business model, focused strategy, distinct investment profile, and compelling growth potential, Maple Leaf Foods is ready to unlock its potential as a purpose-driven, protein-focused, branded consumer packaged goods company,” Frank said in the release.

Incoming president and CEO of Canada Packers, Dennis Organ, agreed that the approval marks a historic milestone.

“With the confidence of the shareholders, we are excited to take our next steps as a global leader in sustainably produced, premium quality, value-added pork with diversified sales mix and global reach,” he said said.

The transaction will benefit all stakeholders, said executive chair Michael McCain.

“Shareholders will be able to participate in not one, but two strong, independent, sustainable and purpose-driven businesses, each with a clear mandate and investment profile,” he said.

Deal announced last year

Maple Leaf announced last July, that it would split off its pork division into an independent company, including plans to retain a 19.9 per cent ownership of the pork business.

The spin-off will separate Maple Leaf Foods’ plant-based and prepared foods operations from its pork business, creating two independent publicly-traded companies. The transaction is expected to close in the second half of 2025, pending an advance tax ruling and other customary conditions.

The post Maple Leaf Foods spin off approved appeared first on Country Guide.

The lawsuit is related to the 2014 sale of then Maple Leaf-controlled Canada Bread Company to Bimbo, the Mexican firm said in a statement, citing “fraudulent and negligent misrepresentation” during the sale process.

Maple Leaf Foods’ executive chair Michael McCain dismissed the claims as “ridiculous,” accusing Bimbo of using the lawsuit to divert attention from its own mismanagement of the business.

— Reporting by Natalia Siniawski

The post Mexico’s Bimbo files $1.4 billion lawsuit against Maple Leaf Foods appeared first on Country Guide.

“This choice reflects our deep respect for the history and legacy of this iconic brand, while affording us the opportunity to bring it forward and blend it with our ambitious vision for the future as a world-leading pork producer,” said pork division president Dennis Organ in a news release.

Organ is set to be CEO of Canada Packers.

Maple Leaf announced in July it would split off its pork division into an independent entity. It will retain a 19.9 per cent ownership of the pork business.

The two companies will form an “evergreen” pork supply agreement to provide Maple Leaf with pork, and Canada Packers with a secure “anchor customer,” the news release said.

The separation is set for some time next year.

Maple Leaf will continue to produce consumer packaged goods, the news release said.

Maple Leaf Foods Inc was formed in 1991 when Canada Packers merged with Maple Leaf Mills Ltd, according to Maple Leaf’s website.

Canada Packers formed in 1927 when the Harris Abbatoir Company and the William Davies Company Ltd merged, the Manitoba Historical Society’s website says.

The post Canada Packers name reemerges as Maple Leaf spins off pork division appeared first on Country Guide.

“Maple Leaf Foods has done nothing wrong here,” the company said in a Sept. 18 news release ahead of a scheduled Sept. 19 court hearing.

Earlier this month, Canada Bread alleged that Maple Leaf Foods personnel “directed and participated in certain anti-competitive conduct” that was investigated by Canada’s competition bureau and then “used Canada Bread as a shield” after Canada Bread was fined $50 million in 2023. Maple Leaf Foods was then majority owner of Canada Bread, which has been owned by Grupo Bimbo (Bimbo Canada) since 2014.

In 2023 Ontario’s Superior Court fined Canada Bread after the company pled guilty to four counts of fixing bread prices in 2007 and 2011. The allegations came to light in an industry-wide federal investigation launched in 2017 by the Competition Bureau.

Maple Leaf Foods said Canada Bread must want to embroil it into ongoing class action proceedings and added that the Ontario Superior Court rejected similar claims against Maple Leaf three years ago.

“Canada Bread is using this, and other false claims, in a transparent attempt to set itself up to try to recover damages from Maple Leaf Foods related to Canada Bread’s own decision to seek leniency from the Competition Bureau in 2017 for an alleged conspiracy that Maple Leaf Foods and others say never actually occurred,” the news release said.

“We will continue to vigorously defend ourselves against these (and other) unfounded claims,” it added.

Earlier this summer, grocery giant Loblaw (Loblaw Companies Limited) and parent company George Weston Limited announced that a $500 million settlement had been reached in a class action suit concerning their involvement in the bread price-fixing scandal. The parties named in the class action suite are Loblaw, George Weston, Canada Bread, Sobeys, Metro, Wal-Mart and Giant Tiger, according to class action firm LPC Advocats’ website.

The post Maple Leaf Foods defends against claims it used Canada Bread as a shield in price fixing investigation appeared first on Country Guide.

In a news release today, Canada Bread alleged that Maple Leaf Foods personnel “directed and participated in certain anti-competitive conduct” that was investigated by Canada’s competition bureau and then “used Canada Bread as a shield” after Canada Bread was fined $50 million in 2023. Maple Leaf Foods was then majority owner of Canada Bread, which has been owned by Grupo Bimbo (Bimbo Canada) since 2014.

In 2023 Ontario’s Superior Court fined Canada Bread after the company pled guilty to four counts of fixing bread prices in 2007 and 2011. The allegations came to light in an industry-wide federal investigation launched in 2017 by the Competition Bureau.

Canada Bread’s claim against Maple Leaf seeks to hold the company to account “for any and all of its costs, expenses and damages resulting from such breaches, including those related to the Competition Bureau’s investigation.”

Earlier this summer, grocery giant Loblaw (Loblaw Companies Limited) and parent company George Weston Limited announced that a $500 million settlement had been reached in a class action suit concerning their involvement in the bread price-fixing scandal. The parties named in the class action suite are Loblaw, George Weston, Canada Bread, Sobeys, Metro, Wal-Mart and Giant Tiger, according to class action firm LPC Advocats’ website.

The post Canada Bread takes legal action against Maple Leaf in bread price fixing matter appeared first on Country Guide.

Maple Leaf Foods will retain a 19.9 per cent ownership position in the newly formed pork company, the name of which will be announced in the coming months, the company said.

Maple Leaf will join a host of companies that have demerged their businesses to streamline operations and realize more value.

Globally, several companies including most recently chemical maker DuPont have moved to break up their businesses in an attempt to increase profitability and revenue growth.

The spinoff company will enter into a pork supply agreement with Maple Leaf Foods and will continue to supply pork at market prices to meet the needs of the prepared foods business.

Maple Leaf Foods will in turn provide the new company with brokerage services in North America, as well as certain other services.

The owner of Schneiders, a premium meat products brand, said its separation plan has the support of McCain Capital and the McCain family, which has the largest and controlling stake in Maple Leaf Foods.

Maple Leaf Foods will continue to be led by CEO Curtis Frank, while Dennis Organ, who headed the pork business, will become the CEO of the new company.

The separation plan, which has been approved by the board of directors, is expected to be completed in 2025.

Upon completion of the separation, existing Maple Leaf Foods shareholders are expected to receive an equal part of shares in the new pork company.

—Reporting for Reuters by Anuja Bharat Mistry in Bengaluru

The post Maple Leaf Foods plans to split into two independent public companies appeared first on Country Guide.

“The decision to close any plant is one that we take very seriously,” said Maple Leaf Foods president and CEO Curtis Frank in a news release. “We are very proud of our team at Brantford and appreciate the great work they do each and every day.”

The plant closure will be completed in phases, and most of its further processed poultry production will be consolidated into other facilities.

“The Company will work with the affected Team Members to provide support and assistance through this transition, including supporting other opportunities at other Maple Leaf Foods facilities,” the news release said.

The company had determined the 100-year-old facility would need significant investment to stay operational.

The post Maple Leaf to close Brantford, Ont., plant appeared first on Country Guide.

“With our refreshed strategic Blueprint announced today, we are sharpening our execution focus… aligning the talents of our team to leverage the strength of our portfolio of leading brands, leadership in sustainability and world-class assets,” said Curtis Frank, president and CEO of Maple Leaf Foods Inc., in a news release.

Maple Leaf released its fourth quarter financial results on Feb. 22. Over 2023, its meat protein group’s sales increased about three per cent to $4.74 billion.

However, in Q4, sales didn’t meet expectations “as a result of global pork market dislocations that have persisted longer and deeper than we anticipated, and a challenging consumer demand environment,” Frank said in the news release.

“Plus we still have a short distance to go to bring home the full benefits from our London Poultry and Bacon Centre of Excellence projects,” he said.

At the end of 2023, the meat protein group had an adjusted EBITDA of $463 million, up 22.3 per cent from 2022.

The plant protein group saw sales of $147 million, down just over 13 per cent from 2022.

“The sales decline was driven by lower volumes in retail and foodservice products, partially offset by pricing action implemented in prior quarters to mitigate inflation,” Maple Leaf said in its 2023 annual report.

The plant division’s end-of-year EBITDA was a loss of $32.9 million compared with a $105.4 million loss in 2022. The company said this improvement came on reduction of startup expenses, higher pricing and “operational improvements.”

In an emailed statement, a spokesperson for Maple Leaf said the plant-based business had performed well in Q4, posting a positive adjusted EBITDA of $0.1 million ($100,000).

Meat processors struggled in 2023, with Olymel dialing back hog production in Alberta and Saskatchewan early in the year, and closing processing plants in Ontario and Quebec.

“Over the past two years it is well documented that Olymel has experienced significant losses in the processing of fresh pork as a result of limited market access globally,” Olymel CEO Yanick Gervais said May 2023.

“Now, coupled with stubbornly high feed costs, resulting in unprecedent losses in the hog sector, we have little choice but to retract and position ourselves for success in the future when conditions improve.”

Manitoba-based Hylife Foods shuttered its Windom, Minnesota plant at the beginning of June, and laid off a handful of mainly administrative workers in Manitoba, citing “current global condition.”

In the plant protein space, Nourish Marketing noted in its 2024 trend report that while consumer curiosity drove the first wave of plant-based meat analogues, most consumers “will not pay a price comparable to meat for a product they view as a disappointing alternative to the real thing” while vegans and vegetarians drive only a small portion of sales.

Nourish predicted a consolidation of products in that space and a turn toward more plant-forward options.

The post Maple Leaf combines plant, meat protein divisions appeared first on Country Guide.

Ontario’s Superior Court on Wednesday sentenced Toronto-based Canada Bread Co. after the company pled guilty to four counts of fixing bread prices in 2007 and 2011.

The allegations to which Canada Bread pled guilty came to light in an “industry-wide” federal investigation launched in 2017 by the Competition Bureau. The bureau defines price-fixing as a form of illegal cartel behaviour in which two or more competing businesses agree to set the same prices for goods or services.

According to the federal Public Prosecution Service, an agreed statement of facts filed in court has Canada Bread — which at the time was majority-owned by Maple Leaf Foods — admitting it entered into arrangements with competitor Weston Foods and others to increase wholesale prices on four occasions.

The arrangements, according to the statement of facts, led to two price increases — one each in October 2007 and March 2011. The Competition Bureau, in a separate release Wednesday, said the increased prices affected “various bagged and sliced bread products, such as sandwich bread, hot dog buns and rolls.”

Canada Bread, citing court documents, said that in 2007 and 2010-11, “one or more” senior executives at Weston made four pricing arrangements directly with the then-CEO of Canada Bread.

Weston, its sister firm Loblaw and their parent firm George Weston Ltd. have received immunity from prosecution in exchange for “full co-operation” with the bureau’s investigation, the bureau said.

READ MORE: Loblaw, Weston bake the numbers, burn consumers

The $50 million fine on Canada Bread was the maximum applicable, at $10 million each for the pre-2010 counts and $25 million each for the remaining two counts, minus a “leniency rebate” of about 30 per cent, given the company’s guilty plea and current co-operation with the probe.

The Competition Bureau on Wednesday described the record fine for Canada Bread as a “significant milestone” in its ongoing investigation, looking at alleged price-fixing between producers to raise wholesale bread prices, as well as alleged price-fixing between grocery stores to raise retail prices.

That ongoing probe continues to investigate other companies, the bureau said Wednesday, naming Maple Leaf as well as retailers Metro, Sobeys, Wal-Mart Canada and Giant Tiger. The bureau said its probe has included search warrants executed at those companies as well as at Canada Bread and at Overwaitea, the B.C. parent of retailer Save-On-Foods.

“Fixing the price of bread — a food staple of Canadian households — was a serious criminal offence,” Matthew Boswell, Canada’s commissioner of competition, said in the bureau’s release. “Our continuing investigation remains a top priority. We are doing everything in our power to pursue those who engage in price-fixing.”

As for Canada Bread, the senior leadership responsible for the price-fixing is no longer with the company, the bureau said. Canada Bread has been owned since 2014 by Mexican bakery giant Grupo Bimbo and now operates under the name Bimbo Canada.

Canada Bread, which went by that name in a separate release Wednesday on the matter, emphasized in that release that Grupo Bimbo “was not told of, nor did it uncover, this prior conduct during the sale process” and that Bimbo “only learned about the conduct in 2017.”

Since then, Canada Bread said, its new management has provided “material and consistent co-operation” to the Competition Bureau in the probe and has “established controls and initiatives to create a first-tier compliance program.”

“Under new ownership, Canada Bread is committed to being a responsible partner to our valued customers and making bread an accessible and reliable food source for Canadians,” vice-president Alice Lee said in Wednesday’s release. “We are pleased to have resolved this matter, and we look forward to building upon our investments in Canada.”

Canada Bread also said Wednesday that Bimbo is “considering all legal options against those responsible for the conduct addressed in court today.”

Bimbo Canada today operates 16 bakeries and 11 distribution centres across Canada. Its retail bread brands include Dempster’s, Pom, Stonemill, Bon Matin and Ben’s, among others. — Glacier FarmMedia Network

The post Canada Bread fined $50 million over price-fixing appeared first on Country Guide.

Maple Leaf Foods on Thursday reported a net loss of $311.89 million on $4.739 billion in gross sales for its fiscal year ending Dec. 31, 2022, down from net earnings of $102.82 million on $4.521 billion in sales in 2021.

For its fourth quarter alone, the company booked a net loss of $41.49 million on $1.186 billion in sales, down from net earnings of $1.88 million on $1.12 billion in sales in the year-earlier period.

The past year “was clearly a year of unprecedented challenges for us on many fronts, including hyper-inflation, dislocation in the pork markets, supply chain dysfunction, job vacancies and a cyberattack,” CEO Michael McCain said in a release Thursday.

Despite all that, he said, “we have maintained a steady hand on executing our plans including aggressively building our sustainability platform, starting up over $1 billion of new assets and converting our plant-based business model to profitable growth.”

McCain said the company “continue(s) to see an inflection point in our business,” noting the ongoing startup of Maple Leaf’s new poultry processing plant at London, Ont.

The company also expects its nascent plant-based protein business is “on track to get to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) neutral or better” in the back half of 2023, he said.

The London poultry plant, construction of which was first announced in 2018 for completion in 2021, was delayed into 2022, reportedly due to wet weather and the COVID-19 pandemic. First budgeted at $660 million, the total capital spend on the new plant was pegged in Thursday’s report at $772 million.

By the end of 2023, though, the new London site is expected to have consolidated the work of five of the company’s existing Ontario poultry processing plants, four of which have been slated to be closed.

McCain told analysts on a conference call Thursday that the new London plant is expected to add $100 million to the company’s EBITDA margin on an annualized basis by the end of this year, whether the market dynamic seen in 2022 improves or not.

Another $30 million will be added to that figure during the ramp-up of the company’s “bacon centre of excellence” at its Lagimodiere Boulevard prepared meats plant in Winnipeg, also independent of the market dynamic.

The Winnipeg plant has seen expansions and upgrades in recent years for both bacon and ham processing, as the company consolidated that business from other plants across the country.

Its most recent “bacon centre of excellence” expansions, which included an additional smokehouse, two new pre-cooked bacon production lines and a new line for bacon bits and chips, involved a capital spend of $182 million, the company said Thursday.

Furthermore, company officials said exports to China have now resumed from Maple Leaf’s main hog slaughter and fresh pork cutting plant at Brandon, Man., following their suspension in 2020. The resumption of exports from Brandon to China will be “accretive to our earnings” starting early in the second quarter of 2023, the company said.

Maple Leaf and other companies are expanding back into the Chinese market just as demand for pork there is increasing and the pork supply from European exporting nations is seen to be declining, officials said.

The company said its “inflection point” will see a shift away from “pandemic-induced supply chain instability,” product prices lagging behind the current rate of inflation and a “sustained period of investing over $1 billion in new assets.”

Instead, Maple Leaf said it expects to see a transition this year to “supply chain stability.” Product pricing “to mitigate inflation” will be fully in place, also by the end of the second quarter of this year.

The company is also expecting “normalized” global pork markets, for which it said the “green shoots” are now visible.

“These unprecedented markets will normalize; they always do,” McCain said in Thursday’s release.

Maple Leaf in its fourth quarter also incurred an estimated $23 million in one-time costs from a ransomware attack on its computer systems in November.

The release of Maple Leaf’s 2022 ledger follows a report of losses from another major Canadian pork and poultry packer.

Quebec-based Olymel, the meat packing arm of Sollio Co-operative Group, in February reported a $445.7 million loss on $4.6 billion in sales for its fiscal year ending last Oct. 29. — Glacier FarmMedia Network

The post Maple Leaf sees ‘inflection point’ beyond red ink of 2022 appeared first on Country Guide.