PITTSBURGH and ST. LOUIS, July 7, 2000 /PRNewswire/ -- Following today's
announcement of the vote by the Commissioners of the FTC to challenge H. J.
Heinz Company's (NYSE: HNZ) acquisition of Milnot Holding Corporation
(announced February 28, 2000), the H. J. Heinz Company stated that its
acquisition of Beech-Nut is in the best interests of American consumers and
will result in lower prices, improved product offerings and more innovative
competition in the baby food category. Heinz intends to vigorously defend the
acquisition in the courts as the best way to inject competition into this
category. Gerber has long held an unchallenged monopoly position (with a
market share exceeding 70%) because its competition has been divided between
two regional players, Heinz and Beech-Nut, each with distribution in less than
half of the U.S. A strong number-two competitor is clearly better for
consumers than two smaller companies facing a monopoly.
Heinz noted that a combination of Heinz and Beech-Nut will bring
nationally available value-priced baby foods and more choices for parents.
Heinz's strategy is to grow its top line by expanding baby food usage and by
offering lower prices. The U.S. retail trade also generally welcomes the
transaction because more innovation will energize baby food sales and increase
competition against Gerber.
Heinz's Director of Corporate Nutrition David Yeung said: "American babies
have for too long been denied the new ideas, great nutrition and exceptional
taste in formulated baby foods enjoyed by Europeans. Heinz is a leading baby
food company in Europe and, with the efficiencies and increased reach of a
Heinz/Beech-Nut combination, will leverage its global expertise in child
nutrition and R&D for the benefit of American babies. European infant food
products include new microwaveable meals, new packaging that offers greater
freshness and taste and a rigorous quality monitoring system, known as
Environmental Oasis."
As a buyer at a major supermarket chain noted, "this will bring the baby
food category to a new level. The two little guys would be able to give the
big guy a run for his money."
Scott Meader, President and CEO of Milnot Holding Corporation, said: "The
combination of Heinz and Beech-Nut is in the best interests of American
consumers because it is pro-competitive and will result in more innovation to
reinvigorate the baby food category."
Heinz's annual baby food sales in the U.S. are approximately $100 million,
with global baby food sales exceeding $1 billion. Heinz is number one in
infant foods in Canada, the U.K., Italy, Australia, New Zealand, Venezuela,
China and other markets. Heinz recently announced year-end earnings in excess
of expectations, with five of its seven key global businesses recording
compound annual growth rates of 5-12% over the past three years.
Editor's note: For the February 28, 2000 news release, visit
http://www.heinz.com.
ABOUT HEINZ: With sales over US$9 billion, H. J. Heinz Company is one of
the world's leading marketers of branded foods to supermarkets and away-from-
home eating establishments. Its 50 companies operate in some 200 countries,
offering more than 57 hundred varieties. Among the company's famous brands
are Heinz, StarKist, Ore-Ida, 9-Lives, Weight Watchers, Wattie's, Plasmon,
Farley's, Smart Ones, The Budget Gourmet, Linda McCartney, San Marco, Go
Ahead!, Bagel Bites, John West, Petit Navire, Boston Market, Skippy, Kibbles
'n Bits, Pounce, Wagwells, Nature's Recipe, Orlando, ABC, Olivine and
Pudliszki. Information on Heinz is available at http://www.heinz.com.
SOURCE H. J. Heinz Company
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Related links:
http://www.heinz.com
Company News On-Call:
http://www.prnewswire.com/comp/575757.html or fax,
800-758-5804, ext. 575757
CONTACT:
MEDIA: Ted Smyth, SVP-Corp. & Govt. Affairs,
412-456-5780; Debbie Foster, Director-Corp. Comm., 412-456-5778;
or Jack Kennedy, GM-Strategic Comm., 412-456-5923, all of H.J.
Heinz Company; Debbie Bolding, GM - Communications, 412-237-5796,
of Heinz North America; or Sal Stazzone, VP-Marketing,
314-655-2113, of Milnot; or Nicholas Alexos, Partner,
312-895-1260, of Madison, Dearborn Partners, Inc.; INVESTORS:
Jack Runkel, VP-Investor Relations, 412-456-6034, of Heinz
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