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Menu Foods posts $62M net loss for 2007

Menu Foods in Canada has been hit hard by last year's pet food scare involving Chinese melamine. The company posted a net loss of $62 million for fiscal 2007.

Menu Foods Income Fund reported a net loss of $62.13 million on $244.8 million in sales for the year, down from $6.43 million in net income on $356.2 million in sales during 2006.

Recall in March
"It would not be an overstatement to say that 2007 was the most unsettling time in Menu's 37-year history," the income trust said in its year-end report. The company launched a recall in March 2007 , following indications that some cuts-and-gravy dog and cat foods made by Menu for in-store brands and other companies may have been affecting the renal health of some animals in the U.S.

The recall, directly, cost Menu Foods $55 million, but it also cost the company "significant sales" after it suspended shipments of all cuts-and-gravy products. Customers who'd accounted for approximately 37% of Menu's volume in 2006 decided to stop buying its products, the company said.

Getting back in business
However, "throughout the last half of 2007, Menu's remaining customers have been getting back into business," the company said, and its sales volumes are now "slowly but surely" increasing. Menu last month "followed the leading national brand manufacturers" and raised the prices charged to its private-label customers. Those increases are expected to increase Menu's sales figures by over three per cent, and help it recover some of the cost increases the company had eaten since its last price increase, the company said.

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(Source: Alberta Express)

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