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
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
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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