News Briefs

MONTREAL - Saputo Inc. has signed a deal to sell two milk processing plants in Australia to supermarket giant Coles Group Ltd. for about $95 million.

The Canadian diary giant says the fresh milk processing facilities are in the Australian states of Victoria and New South Wales.

Saputo says the deal is expected to close in the second half of the year and is subject to customary conditions, including clearance from the Australian Competition and Consumer Commission.

Coles Group includes grocery stores, liquor stores, fuel and convenience retailers, a loyalty program and financial services.

Saputo says the sale will help streamline its operations and allow it to reinvest in other areas of its business.

CEO Lino Saputo says the company is continually working to ensure it has the right manufacturing footprint and product offering to enhance its position as a high-quality, low-cost processor.

``This marks an important step in executing our long-term vision for success in Australia as we maintain a sharp focus on efficiency to ensure we maximize the return on every litre of milk,'' he said in a statement.

Australia deregulated its dairy market and eliminated support prices and quotas in 2000.

According to Saputo's website, the company first entered Australia in 2014, acquiring a majority interest in the Warrnambool Cheese and Butter Factory Co. Holdings Ltd.

Quebec-headquartered Lassonde Industries Inc. reported $123.6 million in profit for the fourth quarter of fiscal 2022, down $10.5 million from the previous year.

The agri-food company attributed the loss to a number of factors, noting it took a $5.2 million hit in 2022 following a production interruption of the cranberry sauce line at its New Jersey plant. 

Higher input costs also played a role, particularly for apple and orange concentrates and PET resin, including an increase in the cost of transporting the produce to Lassonde’s plants, the company said.  

Sales were up 9.5% to $556 million for the quarter.

Gross profit for the full year reached $523.3 million, up $1.4 million from 2021. Sales totalled $2.15 billion, up 11.3% from the previous year.

"Despite a challenging year impacting our financials, we achieved an important milestone in 2022 with sales exceeding the $2 billion mark for the first time in our history, representing almost 14% growth year-over-year. This achievement reflects the important efforts of our employees in the context of severe macro-economic headwinds and industry-wide challenges. During the past year, our team worked diligently to strengthen our leadership position in the North American food and beverage sector, with a particular focus on improving U.S. operations. We anticipate that tangible results from our operational excellence efforts will gradually become apparent in 2023 and 2024, establishing a clear path towards long-term profitable growth," said Nathalie Lassonde, CEO and vice chair of the board of directors of Lassonde Industries Inc., in a statement.

Looking ahead, Lassonde expects the financial health of consumers, inflation and supply chain disruptions to have the biggest impact on its performance in fiscal 2023.

The company said it expects the effects of cost increases on its branded and private label product offerings to continue to be felt in early 2023. It also expects further “pricing action” to be implemented as inflation persists.

-Canadian Grocer

OTTAWA - The federal minimum wage is rising to $16.65 per hour on April 1, up from $15.55.

The government says the increase is based on the consumer price index, which rose 6.8% in 2022.

The federal minimum wage applies to the federally regulated private sectors, including banks, postal and courier services, and interprovincial air, rail, road, and marine transportation.

Ottawa set a federal minimum wage of $15 per hour in 2021 and increases it each year based on inflation.

The changes are made every year on April 1.

Where the provincial or territorial minimum wage rate is higher than the federal rate, employers must apply the higher amount.

Manitoba announced its minimum wage is to rise to $15.30 an hour on Oct. 1 to help low-income earners deal with the rising cost of living.

The wage, normally adjusted every fall in line with inflation, is currently $13.50 an hour. It's already set to rise to $14.15 on April 1 as part of an inflation-fighting measure the government announced last fall.

On April 1, 2023, Yukon’s minimum wage will rise from $15.70 to $16.77 per hour, the territorial government confirmed on February 23, 2023. 

As well, Quebec’s minimum wage will increase by one dollar from $14.25 an hour to $15.25 an hour on May 1, 2023, 

OTTAWA - Canada's ban on the manufacture and import for sale of some plastic items, including grocery bags and straws, has taken effect.

As of today, companies can no longer produce or bring into Canada plastic checkout bags, cutlery, stir sticks, straws and takeout containers - and in a year, it will also be illegal to sell them.

The manufacturing and import ban will extend to the plastic rings used to package six-packs of canned drinks next June and their sale will be prohibited a year after that.

The federal government estimates that getting rid of the single-use plastics will eliminate 1.3 million tonnes of difficult-to-recycle plastic waste and a million garbage bags' worth of pollution.

Prime Minister Justin Trudeau promised in 2019 that a ban would take effect by 2021, but it took the government a year longer to figure out a regulatory framework to make it happen.

Statistics published last month suggested that Canadians were already cutting back on using items such as straws and plastic bags ahead of the national ban.

READ: Planning for the plastics ban

WASHINGTON (AP) - The Supreme Court on Monday refused a request from tobacco companies to stop California from enforcing a ban on flavoured tobacco products that was overwhelmingly approved by voters in November.

R.J. Reynolds and other tobacco companies sought the high court's intervention to keep the ban from taking effect by Dec. 21.

There was no additional comment from the justices and no noted dissents.

The ban was first passed by the state legislature two years ago but it never took effect after tobacco companies gathered enough signatures to put it on the ballot. But nearly two-thirds of voters approved of banning the sale of everything from cotton-candy vaping juice to menthol cigarettes.

Supporters of the ban say the law was necessary to put a stop to a staggering rise in teen smoking.

R.J. Reynolds filed a federal lawsuit filed the day after the Nov. 8 vote, but lower courts refused to keep the law on hold while the suit proceeds.

Menthol cigarettes make up about a third of the market in California, the companies said in urging the Supreme Court to keep them from losing so much business in the nation's largest state.

They argued that the authority to ban flavoured products rests with the federal Food and Drug Administration.

California responded that federal law comfortably allows state and local governments to decide which tobacco products are to be sold in their jurisdictions. And the state noted that the companies only went to the Supreme Court after spending ``tens of millions of dollars'' in a losing cause at the polls.

California will be the second state in the nation, after Massachusetts, to enact a ban prohibiting the sale of all flavoured tobacco products. A number of California cities, including Los Angeles and San Diego, have already enacted their own bans, and several states have outlawed flavoured vaping products. So far no legal challenges to those bans have prevailed, but the companies have an appeal pending at the high court in their fight with Los Angeles.

It's already illegal for retailers to sell tobacco to anyone under 21. But advocates of the ban said flavoured cigarettes and vaping cartridges were still too easy for teens to obtain. The ban doesn't make it a crime to possess such products but retailers who sell them could be fined up to $250.

In addition to menthol and other flavoured cigarettes, the ban also prohibits the sale of flavoured tobacco for vape pens, tank-based systems and chewing tobacco, with exceptions made for hookahs, some cigars and loose-leaf tobacco.

-The Associated Press

MONTREAL - Dollarama Inc. recorded another strong quarter as inflationary pressures continue to drive consumer demand for consumable products at the discount retailer.

The Montreal-based retailer raised its comparable-store sales growth guidance Wednesday as it reported that its third-quarter profit and sales were up compared with a year ago.

During a call with analysts, Dollarama's chief financial officer J.P. Towner said the retailer saw a third consecutive quarter of "higher than historical demand'' for consumable products, a category that includes food as well as items such as laundry detergent that can only be used once.

"Canadians from all walks of life continue to seek value in lower prices on the goods they need,'' he said.

The company cited current economic conditions as a significant factor in the demand from new customers as food prices have increased faster than overall price growth figures through much of the year, peaking with 11.4 per cent increase in August.

During the call, Dollarama's chief executive officer Neil Rossy said convenient store locations and low costs will retain the discount retailer's new customer base.

"Our value promise and a high inflation environment is even more relevant as consumers juggle the pressure on their wallets and adjust their spending strategies,'' said Rossy.

As Dollarama, traditionally known for prices between $1.25 and $2.50, continues to stock additional items up to $5, Rossy said the rollout has gone as planned and the company has yet to receive negative feedback regarding the higher prices.

Rossy said while the company would like to have a $1 offering for each category, in some cases it is not possible due to the cost of raw materials and higher prices from domestic vendors.

"I can't control, even though I would love to, what our vendors come in with as far as cost,'' he said.

The chief executive said the company will continue "fighting the fight'' in regard to purchasing and managing the cost, especially that of domestically purchased goods.

The financial pressures placed on Dollarama are the same as every other Canadian retailer, said Rossy.

The discount retailer opened 18 new store locations in its third quarter for a year-to-date total of 41 net new stores.

"We expect a busy Q4 on the real estate front and remain on track to reach our full-year target of 60 to 70 net new stores,'' said Rossy.

Dollarama announced Wednesday that it had signed a deal to buy three contiguous industrial properties in Mount Royal, Que., near its centralized logistics operations and next to its distribution centre for $87.3 million.

The company plans to redevelop the site to support its future logistics and warehousing needs.

"This will provide us with additional flexibility to support our long-term logistics needs as we pursue our target of 2,000 Dollarama stores in Canada by 2031,'' Rossy said.

RBC Dominion Securities Inc. analyst Irene Nattel said in a report that the company's third-quarter results reflect Dollarama's "strong value positioning for consumers, particularly sought after in the current high inflation environment.''

Dollarama reported earnings of $201.6 million or 70 cents per diluted share for the 13-week period ended Oct. 30, compared with a profit of $183.4 million or 61 cents per share in the same quarter last year.

In its guidance for the year, Dollarama says it now expects comparable-store sales growth for its current financial year to be in a range of 9.5 to 10.5% compared with earlier expectations for a range of 6.5 to 7.5%.

The company also narrowed its guidance for its annual gross margin as a percentage of sales to a range of 43.1 to 43.6% compared with earlier expectations for a range of 42.9 to 43.9%.

Sales for the quarter totalled $1.29 billion, up from $1.12 billion a year earlier.

Comparable-store sales rose 10.8% as the number of transactions climbed 10.3% and the average transaction size gained 0.4%.

-The Canadian Press