Sobeys and Agropur enter into dairy manufacturing agreement
Stellarton, Nova Scotia-based Sobeys Inc. said it entered into an agreement with Agropur Cooperative, Longueuil, Quebec, under which Agropur will purchase Sobeys' dairy manufacturing facilities in Western Canada and supply milk, yogurt and ice cream to Sobeys, Safeway and IGA stores in Western Canada under long-term supply arrangements.
According to Sobeys, the purchase price of $356 million includes:
- Sale of four manufacturing facilities located in Edmonton, Alberta; Winnipeg, Manitoba; and Burnaby, British Columbia.
- Licensing of the Lucerne trademarks to Agropur for milk production and distribution.
- Long-term milk, yogurt and ice cream supply agreements that will come into effect upon transfer of the facilities to Agropur and expiry of current supply agreements.
- Long-term national supply agreement for private label natural cheese.
"This agreement maximizes the value for these assets while securing long-term supply agreements that create synergies for our entire Canadian business," said Marc Poulin, president and CEO of Sobeys Inc. "It also ensures that these facilities will continue to produce the very popular Lucerne dairy brand, which will not only remain available in our Safeway banner stores, but will be expanded to our network of Sobeys and IGA stores throughout the West."
Sobeys said it acquired the dairy manufacturing facilities as part of its November 2013 purchase of Canada Safeway.