May 31, 2007 10:44 AM
The head of Menu Foods Income Fund (TSX: MEW.UN) says the company has lost two major contracts with unnamed North American customers as the pet food industry responds to the fallout of a contaminated food scandal.
CEO Paul Henderson said Thursday that the pet food maker, which has been embroiled in a massive pet food recall over tainted wheat gluten from China, has lost two contracts representing about 4.5 per cent of sales last year.
The first customer has cancelled its orders for pouched food, he said. The other has opted to make its own canned food.
But Henderson said he wasn't able to tie the sales losses directly to the pet food recall.
"They don't necessarily share the rationale for their decision. It would be speculation on my part," Henderson said in a conference call.
The contract losses are on top of an announcement made March 16, the day of a major recall, that Menu was losing cuts-and-gravy product orders from its largest customer. The company represented about 11 per cent of sales.
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