Lactalis plans to cut the amount of milk it collects annually by 450 million litres, or nearly 9 per cent of its overall volume of 5.1 billion litres in France, it said in a statement on Thursday.

The reduction, to start at the end of this year and take effect progressively through 2030, will limit the volume of so-called surplus milk that Lactalis processes to sell abroad as bulk commodities like milk powder, it said.

A greater weighting of consumer products like cheese and yogurts in its processing mix would lead to better farmgate prices for dairy farmers, it said.

“The valuation of surplus milk is often very low and subject to the volatility and unpredictability of world markets,” Serge Moly, Lactalis’ supply director, said in the statement.

But dairy farmers’ union the FNPL criticized in a statement what it called a “withdrawal from the French dairy sector”.

Arnaud Rousseau, head of France’s biggest farmer union the FNSEA, told France Info radio that the issue was “ensuring dairy producers will continue to have someone who will collect their milk”.

A dwindling number of livestock farms in France, the European Union’s biggest agricultural producer, has been a factor in discontent that spilled over into protests earlier this year.

The FNSEA has been pressing France’s new government to implement support measures that were delayed by a snap legislative election at the start of summer.

Lactalis said its volume cuts, which will cover two areas of France where its supplier network is more spread out, will be subject to discussions with producers.

A Lactalis spokeswoman added that France faced stiff competition from countries like New Zealand to export bulk ingredients.

The international market is facing declining demand from China. The country is also conducting an anti-subsidy probe into some EU dairy products, part of a riposte against proposed EU levies on Chinese electric vehicles.

– Additional reporting by Jean-Michel Belot and Sudip Kar-Gupta

The post French farmers fear for dairy herd as Lactalis cuts milk purchases appeared first on Grainews.

The Canadian arm of France’s Lactalis said Wednesday it will stop fluid milk processing and packaging at its plant at Sudbury effective Sept. 30 and convert that plant to a “modern, dedicated plant-based production facility.”

More details on Lactalis’ expansion at Sudbury and the specific plant-based product offerings to be made there will be “announced in the coming months,” the company said.

Halting the fluid milk line at Sudbury stems from a “long-term volume decline and increased costs in the fluid milk market in Ontario that have led to decreased profitability and economic sustainability” there, the company said.

Lactalis’ milk customers and consumers supplied by the Sudbury plant will see “no disruption to product supply or service,” CEO Mark Taylor said in a release, as milk processing will go to the company’s other fluid plants in Ontario and Quebec.

Plant-based foods Lactalis already sells in Canada include its Lactantia margarine brand; its Sensational Soy line of organic soy milk alternatives; and coconut-based alternatives in its Siggi yogurt line.

Dairy remains Lactalis’ core business — with brands also including Iogo, Cracker Barrel, Black Diamond, Olympic and Astro — but “we are constantly following the consumer and continually seeking opportunities to innovate and respond to the market,” Taylor said Wednesday.

The new lines of “complementary” plant-based products “will benefit from our current capacity and capabilities as well as our rich and long-standing dairy expertise,” he said.

Lactalis said it will still operate its refrigerated warehouse at Sudbury and will keep a “majority” of that plant’s workforce, both during the transition period and to handle its new production lines, with “anticipated additional employment opportunities” ahead.

Lactalis today has 19 manufacturing plants in Canada, most of which came to the company when it took majority control of Italian dairy firm Parmalat in 2011. — Glacier FarmMedia Network

The post Lactalis to shift from milk to near-milk at Sudbury appeared first on Grainews.

The deal, as announced Thursday, will include Agropur’s plants at Granby, Que. and Delta, B.C. plus the operations at a distribution centre it leases at Longueuil, Que. Financial terms of the deal weren’t disclosed.

Agropur’s Canadian yogurt business, operating under the name Ultima Foods, includes the Iogo and Iogo Nano yogurt brands, as well as the Olympic brand of yogurt, sour cream and kefir. Lactalis’ current Canadian yogurt roster includes the Astro, Siggi’s and Stonyfield brands.

Yogurt today accounts for about two per cent of Agropur’s milk processing volume and three per cent of its sales, the co-operative said.

“Current market conditions, increasingly aggressive competition and our desire to streamline our business model have prompted us to focus on our most strategic lines of business,” Agropur president Roger Massicotte said in a release.

The yogurt sale, he said, is meant to allow Agropur “to pursue our growth strategy and concentrate our investments.”

“We are very proud of all we have accomplished with Iogo and Olympic, two brands that have played an important role in growing the yogurt category in Canada,”Agropur CEO Emile Cordeau said in the same release.

“However, Agropur’s decision to focus its efforts on its strategic segments means we must streamline our operations. We thank the dedicated employees whose tireless efforts have built Iogo and Olympic into brands consumers trust.”

The co-operative’s yogurt business includes about 450 employees, who will join Lactalis.

The Ultima yogurt business started in 1993 as a joint venture between Agropur and Agrifoods International Co-operative. The j.v. went on to buy B.C. yogurt processor Olympic Dairy in 2004 and introduce Iogo as a new Canadian brand in 2014. Agrifoods International sold its stake to Agropur in 2017.

The deal with Lactalis is subject to the usual conditions — including regulatory approval from the federal Competition Bureau.

The deal “will reinforce Lactalis Canada’s position in the dairy category and will help enable key customer partners in both the retail and foodservice channels (to) meet the growing consumer demand for yogurt products,” Lactalis Canada CEO Mark Taylor said in a separate release.

The company, he said, “is confident that this transaction will positively support dairy farmers, retailers, consumers” and the affected plants’ home communities.

Lactalis, which took over Parmalat in 2011, today operates 17 Canadian plants in Ontario, Quebec, Alberta and Manitoba. Among recent acquisitions, it set up a deal earlier this fall to buy several cheese businesses from Kraft Heinz, among them its grated cheese business in Canada. — Glacier FarmMedia Network

The post Lactalis to buy Agropur’s yogurt business appeared first on Grainews.

After weak sales results and several billion-dollar writedowns over the past two years, there has been market speculation about which categories Kraft Heinz will offload from its balance sheet. The company has reportedly also looked for buyers for its Maxwell House coffee business and Ore-Ida frozen potatoes brand.

Tuesday’s deal, which is expected to close in the first half of 2021, includes Kraft Heinz’s U.S. natural, grated, cultured and specialty cheese businesses — including its Breakstone’s and Cracker Barrel brands — and its grated cheese business in Canada. Kraft Heinz is also selling its international cheese unit outside of Canada and the U.S.

The Chicago-based company will retain its Philadelphia, Kraft Singles, Velveeta and Cheez Whiz brands in the U.S. and Canada. It will also keep the Kraft, Velveeta and Cracker Barrel Mac + Cheese businesses worldwide.

A banking source not involved in the deal said the shredded cheese business in the United States would likely be attractive to Lactalis, as it is “extraordinarily profitable.”

“Buying pre-shredded cheese is like giving money away,” the source said.

Lactalis, which took over Parmalat in 2011, already sells Cracker Barrel cheese in Canada, along with brands such as Black Diamond, Balderson, Amooza, P’tit Quebec, Galbani and President.

— Reporting for Reuters by Richa Naidu in Chicago and Martinne Geller in London. Includes files from Glacier FarmMedia Network staff.

The post Kraft Heinz to sell several cheese businesses to Lactalis appeared first on Grainews.

On the last day of an extended bid on shares it did not already own, the French dairy group reached an overall 89.63 per cent stake in the Italian company, a filing from the Italian bourse showed.

Parmalat was relaunched in 2005 after going bankrupt following a financial scandal and Lactalis won control of it in 2011.

The French company said in December it sought to buy the 12.26 per cent of Parmalat it did not already own with the aim of delisting the group.

Last month Lactalis had raised the price of the shares on offer to three euros (C$4.30) per share after complaints from some investors that its previous bid undervalued the Italian group.

— Reporting for Reuters by Francesca Landini and Elisa Anzolin.

The post Lactalis still short in bid to delist Parmalat appeared first on Grainews.

Lactalis, the world’s largest dairy firm, bought 15.11 per cent of the shares on offer or just under 1.85 per cent of Parmalat, the filing showed. This would give them a total of 89.6 per cent in Parmalat when added to their previous holding in the Italian group.

Parmalat was relaunched in 2005 after going bankrupt following a financial scandal and Lactalis won control of it in 2011.

The French company said in December it sought to buy the 12.26 per cent of Parmalat it did not already own, with the aim of delisting the group.

Earlier this month Lactalis had raised the price of the shares on offer to three euros per share after complaints from some investors that its previous bid undervalued the Italian group.

— Reporting for Reuters by Elisa Anzolin, writing by Giulia Segreti.

The post Lactalis short of threshold to delist Parmalat appeared first on Grainews.

Lactalis, which won control of Parmalat in 2011 amid failed efforts in Italy to mount a domestic counter bid, has launched an offer on the 12.26 per cent of Parmalat it doesn’t already own with the aim of delisting the group.

Lactalis, itself a private company controlled by the Besnier family, is offering to buy Parmalat shares at 2.8 euros (C$3.99) each.

By 11:07 GMT, the stock, which has risen nearly 17 per cent since Lactalis announced its offer in late December, was flat on the day at three euros.

“We believe the price of Lactalis’ offer is too low and does not reflect the real value of Parmalat,” Amber Capital portfolio manager Arturo Albano told Reuters in an interview.

A group of retail shareholders in the Azione Parmalat association has also raised doubts about the price of the bid.

Parmalat buckled in 2003 with a 14 billion-euro hole in its accounts in Italy’s biggest corporate scandal.

It restructured under turnaround expert Enrico Bondi and funds clawed back through a number of lawsuits helped it build a large cash reserve.

Albano said that by taking full control of Parmalat, Lactalis would deprive minority shareholders of potential benefits of a dispute still pending with Citigroup.

“On Dec. 29 we asked (market watchdog) Consob to request Parmalat to provide additional information on the outlook for the next two-three years and on developments related to its dispute with Citi which includes a significant damage request,” he said.

Albano said Amber would start a campaign with proxy adviser Georgeson to explain to other investors why the offer undervalued Parmalat.

“The offer comes after a terrible year in which Parmalat was hit by the crisis in Venezuela … and exchange rates, with the exception of the U.S. dollar,” he said.

Albano noted Parmalat had invested one billion euros in the past three years in countries such as Brazil, Mexico and Australia.

“It is yet to reap the fruits of such investments, as the company’s chairman in person pointed out when we complained at April’s shareholder meeting,” he said.

— Reporting for Reuters by Valentina Za.

The post Lactalis offer for Italy’s Parmalat seen too low appeared first on Grainews.