Canada: Food Report 2015

INTRODUCTION

Since the middle of the last decade, the competitive environment for Canadian food manufacturing and agriculture has changed dramatically. Increasing input and energy costs coupled with a rising Canadian dollar value challenged the competitiveness of Canadian exports globally. Additionally, increased importation of food products continues to negatively impact the trade balance in the processed foods industry.1 These circumstances have significant implications given that approximately half of the value of primary agriculture production in Canada is exported. It remains to be seen whether the recent decline of the Canadian dollar and falling energy prices will help to reverse this trend.

Despite the challenges, Canada's food and agribusiness industry has generally shown resilience. While the recent global recession drove revenues down in most manufacturing sectors, food and agribusiness sectors experienced modest increases. In response to challenges, the food and agriculture sector has restructured and transformed, and the sector continues to be a leading employer in Canada.

In 2014, the Canadian food and agribusiness sector was once again the subject of a number of high-profile transactions (see Notable Transactions, page 2). Canada continues to be a leading exporter, and a significant importer, of agricultural and agri-food products. In 2015, we anticipate growth in the global food and agribusiness sector to be fuelled by reduced input and lower energy costs and as such Canada remains well-positioned to benefit from such increased growth.

The last issue of this report provided an overview of significant transactions and certain regulatory changes affecting the food, beverage and agribusiness sector.

In this issue, we again highlight notable global and Canadian M&A transactions. We also present five feature articles. The first article discusses current trends in commercial urban agriculture and highlights significant international and Canadian initiatives. The second article discusses investment in Canadian farmland by both Canadian and international investors. This report also contains an article comparing the legal landscape of food labelling class actions in the United States and Canada and summarizes Canada's two contested certification decisions with respect to food labelling. We have also included an article outlining the requirements for labelling alcoholic beverages, as well as charts and graphs showing deal values and trends.

This report was prepared by the Blakes Food, Beverage & Agribusiness group based on non-confidential information acquired through our practice and from a review of public information. The information was gathered in the first three quarters of 2014. Our goal in preparing and presenting this report is to highlight those trends and opportunities we believe will have an impact on the food, beverage and agribusiness sector going forward.

The information contained in this report is intended for general informational purposes only and does not constitute legal advice. While care has been taken to ensure the information herein is accurate, we make no representations regarding its accuracy. This report should not be relied on to replace professional advice, legal or otherwise, relating to any specific circumstances.

NOTABLE TRANSACTIONS

Featured Canadian Transactions

Maple Leaf Sells Canada Bread to Grupo Bimbo

On May 23, 2014, Grupo Bimbo, S.A.B. de C.V. of Mexico (Grupo Bimbo) completed its acquisition of Canada Bread Company, Ltd. (Canada Bread) for aggregate cash proceeds of C$1.83-billion by way of a plan of arrangement. Canada Bread is Canada's largest bakery and the owner of the Dempster's baked goods brand, while Grupo Bimbo is one of the world's largest baked goods companies, with operations in 19 countries. The transaction was completed with the support of Maple Leaf Foods Inc. (Maple Leaf), which had held 90 per cent of the shares of Canada Bread. Shareholders received C$72 per share, a 34 per cent premium. Canada Bread was delisted from the Toronto Stock Exchange on May 26, 2014. The acquisition gives Grupo Bimbo a leading market share in Canada and a foothold for expansion into the United States and the United Kingdom, while also allowing Maple Leaf to focus on its core meat operations.

OTPP Acquires Majority Stake in Burton's Biscuit Company

On November 18, 2013, Teachers' Private Capital, the private equity investment division of the Ontario Teachers' Pension Plan (OTPP) agreed to acquire a majority stake in Burton's Biscuit Company (Burton's) from the Canadian Imperial Bank of Commerce and funds managed by affiliates of Apollo Global Management, LLC for US$563.71-million. Burton's is the second-largest biscuit supplier in the U.K. It owns and bakes brands such as Maryland, Jammie Dodgers and Wagon Wheels, and bakes Cadbury biscuits under licence. The acquisition represents the latest in a string of investments by OTPP in U.K. businesses.

Saputo Outbids Rival for Control of Warrnambool Cheese & Butter

On October 17, 2013, Montréal-based dairy company Saputo Inc. (Saputo) announced that it would make a take-over offer for Australian dairy producer Warrnambool Cheese & Butter Factory Co. Holdings Ltd. (WCB). Over the next three months, Saputo increased its offer four times, from an initial offer price of AU$7 per share on October 7, 2013, to a final offer price of AU$9.40 per share on January 28, 2014, in an effort to outbid rival bidders Murray Goulburn Co-operative Co. and Bega Cheese Ltd. When the final offer closed on February 12, 2014, Saputo had acquired an 87.92 per cent interest in WCB for approximately C$500-million. Since Saputo did not acquire 100 per cent of the share capital in WCB, it remained listed on the Australian Stock Exchange.

Aryzta Acquires Pineridge Bakery

On March 10, 2014, Aryzta AG (Aryzta) agreed to buy Pineridge Bakery Inc. (Pineridge) from Pineridge Group, a unit of Swander Pace Capital LLC, for C$377-million. The transaction closed on April 2, 2014. Pineridge is a leading producer of fresh and frozen baked goods in the Canadian market. Aryzta, a Switzerland-based global food business with a leadership position in the speciality frozen bakery sector, made the acquisition concurrently with its acquisition of Cloverhill Bakery, an American baked goods company.

Post Holdings Acquires Golden Boy Foods

On February 1, 2014, Post Holdings Inc. (Post) completed its acquisition of Golden Boy Foods Ltd. for C$320-million in accordance with an agreement announced on December 9, 2013. Golden Boy Foods Ltd. is a British Columbia-based manufacturer of private-label peanut and other nut butters, as well as dried fruits and snacking nuts. Post, a consumer goods company known largely for its breakfast cereal brands, made the acquisition as part of its strategy to strengthen its nutritional products and private-label products categories.

Teachers' Private Capital Invests in Flynn Restaurant Group

An investor group comprised of Teachers' Private Capital, a unit of OTPP, and Flynn Restaurant Group LP's (FRG) management team, led by Chairman and CEO Greg Flynn, acquired an undisclosed minority stake in FRG, a San Francisco-based owner and operator of franchised restaurants, from GS Capital Partners LP, a unit of Goldman Sachs Group Inc., and Weston Presidio LLC, for an estimated US$300-million in cash, in a privately negotiated transaction. With 640 restaurants and US$1.4-billion in sales, FRG is the largest restaurant franchisee in the U.S.

Cooke Aquaculture Acquires Meridian Salmon Farms

On May 14, 2014, Cooke Aquaculture (Cooke), a New Brunswick-based aquaculture business, completed its acquisition of Meridian Salmon Farms Ltd. (Meridian) from Marine Harvest ASA for US$203-million. Meridian has assets located in Shetland and Orkney, and the mainland of Scotland. The acquisition adds U.K. assets to Cooke's portfolio of fish-farming operations, which includes operations throughout Atlantic Canada and Maine, as well as in Spain and Chile.

Forty Creek Sold to Davide Campari-Milano

On June 3, 2014, Italian beverage producer Davide Campari-Milano S.p.A. (Campari) reported the completion of its previously announced acquisition of Forty Creek Distillery Ltd. (Forty Creek) for C$198.2-million. Forty Creek, an Ontario-based producer of spirits, is best known for its self-titled brand of premium Canadian whiskies. For Campari, whose portfolio includes an array of alcoholic and non-alcoholic beverages, the acquisition is an entry point into the growing Canadian whiskey products market.

TreeHouse Foods Acquires Protenergy Foods

On May 30, 2014, TreeHouse Foods, Inc. (TreeHouse), a U.S.-based food-processing company specializing in private-label packaged foods, completed its acquisition of Protenergy Foods Corp. (Protenergy) from Whitecastle Investments Ltd. Protenergy, which is based in Ontario, specializes in the production of soups and sauces in aseptic and sterile packaging. The acquisition will enable TreeHouse to expand its offering of broths, soups and gravies sold under both private labels and corporate brands. TreeHouse paid an estimated C$170-million in cash for the business.

CPPIB Acquires Farmland Portfolio of Assiniboia Farmland

On January 10, 2014, the Canada Pension Plan Investment Board (CCPIB) completed a previously announced transaction to acquire the assets of Assiniboia Farmland LP (Assiniboia), a fund that owns and manages a portfolio of farmland in Saskatchewan, for C$128-million. The acquired portfolio includes approximately 115,000 acres of farmland located throughout Saskatchewan, which largely produces wheat, barley and canola. The acquisition was made pursuant to the CPPIB's agricultural investment program, launched in 2012, which targets the acquisition of farmland in Canada, the U.S., Australia, New Zealand and Brazil.

To view the full article please click here.

The editors would like to thank Andrew Cyr (Articling Student), and Pei Li, Jason Kolarich, David Mender, and Sarah Emery for their assistance in the preparation of this report.

Footnote

1 Douglas Hedley and Canadian Agri-Food Policy Institute (CAPI), "The State of Canada's Processed Food Sector: Trade Balance," November 2012, online: http://capi-icpa.ca/pdfs/2012/CAPI_Processed-Food_Nov2012.pdf.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
26 Oct 2018, Other, Vancouver, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

30 Oct 2018, Other, Toronto, Canada

Please join us for discussions on recent updates and legal developments in pension and employee benefits as well as employment law issues.

12 Nov 2018, Other, Toronto, Canada

Stories aren’t falsehoods. Stories are the root of all effective human communications: they motivate, animate and clarify. If you aren’t telling stories, you probably aren’t getting your point across.

Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions