Quebec dairy co-op to supply Sobeys, IGA, Safeway

Quebec-based dairy Agropur Co-operative has new agreements with Sobeys, to buy several dairy processing operations and to supply dairy products on a long-term basis.

The companies said the value of the transaction totals $356 million.

It includes:

  • The purchase of four plants: two plants in Edmonton, one producing milk and the other ice cream; a milk operation in Winnipeg; and a milk operation in Burnaby, B.C. The plants came to Sobey’s when it bought Canada Safeway in November.
  • The licensing of the Lucerne trademark to Agropur for the production and distribution of fluid milk and cream.
  • Long-term agreements to supply Safeway, Sobeys and IGA stores in Western Canada will come into effect with the transfer of the facilities to Agropur and expiry of current supply agreements.

Agropur is known for brands such as Natrel milk and Oka cheese. It’s IOGO yogurt is a joint venture with Ultima Food.

“This transaction will confirm our leadership position in the Canadian milk industry, for the greater benefit of all of our members‑producers and owners,” Serge Riendeau, president of Agropur said in a news release.

Robert Coallier, chief executive of Agropur, said the business related to these assets, the renewal of certain contracts and the acquisition of the plants represents revenues of more than $400 million.

Sobeys’ dairy activities have 281 employees and process more than 160 million litres of milk per year.

The purchase is subject to usual regulatory approvals.

Founded in 1938, Agropur has sales of more than $3.8 billion.

The co-operative is owned by 3,554 dairy producers and has 6,500 employees. Agropur processes more than 3.4 billion litres of milk per year in its 32 plants across North America.