""""

Required Report - public distribution

**Date:** 12/3/2003

**GAIN Report Number:** CA3074

CA3074

**Canada**

**Retail Food Sector**

**Report**

**2003**

**Approved by:**

![](media/image1.wmf)Gary Groves

U.S. Embassy

**Prepared by:**

Faye Clack Marketing & Communications Inc.

**Report Highlights:**

In 2002 Canada\'s 31 million consumers generated overall retail sales
totaling CDN\$306.4 billion, representing a 6% increase over 2001. The
food channel experienced its largest annual sales gain since 1987,
increasing 5% over 2001 to reach CDN\$66.8 billion or 22% of total
retail sales. Between 1998 and 2002 the increase seen in the overall
retail channel increased a significant 24%, while the food channel grew
16%.

Includes PSD Changes: No

Includes Trade Matrix: No

Annual Report

Ottawa \[CA1\]

\[CA\]

**Table of Contents**

[MARKET SUMMARY 3](#market-summary)

[OVERVIEW 3](#overview)

[CANADA'S GROCERY SUB-SECTORS: CHANNEL BLURRING
5](#canadas-grocery-sub-sectors-channel-blurring)

[OPPORTUNITIES AND CHALLENGES FACING U.S. EXPORTERS:
10](#opportunities-and-challenges-facing-u.s.-exporters)

[ROAD MAP FOR MARKET ENTRY 11](#road-map-for-market-entry)

[MARKET STRUCTURE 16](#market-structure)

[DISTRIBUTION CHANNEL 16](#distribution-channel)

[RETAIL SUB-SECTORS 18](#retail-sub-sectors)

[SUPERMARKETS/SUPERSTORES, MASS MERCHANDISERS AND CLUB WAREHOUSE
18](#supermarketssuperstores-mass-merchandisers-and-club-warehouse)

[CONVENIENCE STORES, GAS MARTS, KIOSKS
22](#convenience-stores-gas-marts-kiosks)

[INDEPENDENT GROCERS: 24](#independent-grocers)

[COMPETITION 25](#competition)

[BEST PRODUCT PROSPECTS: 28](#best-product-prospects)

[PRODUCTS PRESENT IN THE MARKET WITH GOOD SALES POTENTIAL:
28](#products-present-in-the-market-with-good-sales-potential)

[PRODUCTS NOT PRESENT IN SIGNIFICANT QUANTITIES BUT WITH GOOD POTENTIAL
32](#products-not-present-in-significant-quantities-but-with-good-potential)

[PRODUCTS FACING SIGNIFICANT BARRIERS:
34](#products-facing-significant-barriers)

[CONTACTS 36](#contacts)

Canada's Grocery Retail Marketplace

# MARKET SUMMARY

## OVERVIEW 

U.S. agricultural exports to Canada reached a record-high of US\$8.6
billion in FY2002, registering an average annual growth rate above 5.0
percent in the last seven years. Consumer-oriented agricultural products
accounted for 70 percent of total U.S. food and agricultural product
sales to Canada in FY2002, with fresh and processed fruits and
vegetables, snack foods, and red meat products as the category leaders.
Canada is the largest market for U.S. agricultural exports, and American
products account for more than two-thirds of total Canadian agricultural
imports.

In FY2002, U.S. farm, fish and forestry exports to Canada reached \$10.8
billion, almost \$600 million more than to Japan. Canada accounted for
16 percent (\$8.6 billion) of total U.S. food and agricultural product
exports of \$53.3 billion during FY2002. Of the more than \$21.6 billion
in U.S. consumer-oriented agricultural product exports, \$6.0 billion,
almost 28% was destined for Canada. Almost one in every five dollars of
U.S. exports of fish and seafood went to Canada in FY2002. Total
bilateral agricultural trade between the U.S. and Canada exceeded \$18.7
billion in FY2002, more than \$50 million per day. Two-way truck traffic
alone exceeds 7,000 trucks/day, an average of almost one truck every
other minute, 24 hours a day.

> RETAIL FOOD CHANNEL GROWING STEADILY

+-----------------------------------------------------------------------+
| AVERAGE CANADIAN GROCERY CONSUMER 2002:                               |
+-----------------------------------------------------------------------+
| -   Is a median age of 37.9 years                                     |
|                                                                       |
| -   Has a one-in-seven chance of being 65 or older                    |
|                                                                       |
| -   Has an average of 2.5 people per household                        |
|                                                                       |
| -   Spends CDN\$6,217 on food annually \[11.1% of disposable income\] |
|                                                                       |
| -   Earns an average of CDN\$634.30 per week                          |
+-----------------------------------------------------------------------+

> *ACNielsen*

In 2002 Canada's 31 million consumers generated overall retail sales
totalling CDN\$306.4 billion, representing a six-per-cent increase over
2001. The food channel experienced its largest annual sales gain since
1987, increasing five per cent over 2001 to reach CDN\$66.8 billion or
22 per cent of total retail sales.

While 2002 was a significant growth year for all retail sales, between
1998 and 2002 the increase seen in the overall retail channel increased
a significant 24 per cent, while the food channel grew 16 per cent. The
2002 increase seen in this channel is considerable, however, marking the
largest increase experienced in more than five years.

TOTAL 2002 RETAIL SALES BY CHANNEL

![](media/image2.wmf)

*Statistics Canada*

## 

## 

## 

TOTAL FOOD VS RETAIL SALES GROWTH

  ------ ------------------ --------------- ------------------- ---------------
         Food Sales CDN     \% Growth Over  Retail Sales CDN    \% Growth Over
                            Year Prior                          Year Prior

  1998   \$57,664,400,000   \-\--           \$246,674,800,000   \-\--

  1999   \$58,889,300,000   2.1%            \$260,779,500,000   5.7%

  2000   \$61,090,100,000   3.7%            \$277,033,100,000   6.2%

  2001   \$63,651,600,000   4.2%            \$289,130,000,000   4.4%

  2002   \$66,807,000,000   5.0%            \$306,366,000,000   6.0%
  ------ ------------------ --------------- ------------------- ---------------

> *Statistics Canada*

## CANADA'S GROCERY SUB-SECTORS: CHANNEL BLURRING

FOOD CHANNEL SUB-SECTORS

+-------------------+--------------------------------------------------+
| SUPERMARKET:      | A full-line, self-service grocery store with     |
|                   | annual sales of CDN\$2 million or more.          |
+-------------------+--------------------------------------------------+
| SUPERSTORE:       | A supermarket with a minimum of 30,000 square    |
|                   | feet, generating CDN\$12 million or more in      |
|                   | sales annually and offering an expanded          |
|                   | selection of non-food items. Features specialty  |
|                   | departments and extensive services.              |
+-------------------+--------------------------------------------------+
| MASS              | A combined supermarket and discount store        |
| MERCHANDISER:     | selling a wide range of food and general         |
|                   | merchandise. Stores generally average more than  |
|                   | 150,000 square feet.                             |
+-------------------+--------------------------------------------------+
| WHOLESALE CLUB    | A membership retail/wholesale hybrid with a      |
| STORE:            | limited variety of products presented in         |
|                   | warehouse-type atmosphere. These 90,000-plus     |
|                   | square-foot stores typically feature a majority  |
|                   | of general merchandise, as well as a grocery     |
|                   | line dedicated to large size and bulk sales.     |
+-------------------+--------------------------------------------------+
| CONVENIENCE       | A compact store offering a limited line of       |
| STORE:            | high-convenience items. Many sell gasoline and   |
|                   | fast food. Store size averages 2,400 square      |
|                   | feet.                                            |
+-------------------+--------------------------------------------------+
|                   |                                                  |
+-------------------+--------------------------------------------------+
| *INDEPENDENT:*    | *An operator with fewer than four retail         |
|                   | stores.*                                         |
|                   |                                                  |
|                   | -   *VOLUNTARY GROUPS: Typically franchisees of  |
|                   |     larger chain banners, these independents     |
|                   |     operate in major or secondary                |
|                   |     wholesale-sponsored groups. These units      |
|                   |     benefit from volume purchases from           |
|                   |     sponsoring wholesaler.*                      |
|                   |                                                  |
|                   | -   *UNAFFILIATED INDEPENDENTS: Single           |
|                   |     unaffiliated operating units.*               |
+-------------------+--------------------------------------------------+
| *CHAIN:*          | *An operator of four or more retail stores.*     |
+-------------------+--------------------------------------------------+

*Canadian Grocer*

Canada's food channel is a highly consolidated landscape, consisting of
only two conventional national grocery retailers, a handful of
conventional regional players, two mass merchandisers and one club
warehouse format. Convenience chains are primarily regional, with the
exception of the three largest gas companies, which operate gas
convenience marts from coast to coast.

This intense consolidation is due in part to the emergence of Wal-Mart
\[mass merchandiser\] and Costco \[club warehouse\], generating intense
competition within the industry. The conventional grocery channel has
been forced to react swiftly to meet the expanded grocery and fresh food
items these new channels are offering to service the booming one-stop
shopping trend. To remain strong, the conventional grocery channel
consolidated in response.

While consolidation has helped the conventional channel remain strong,
the unconventional channels are getting stronger. Between 1998 and 2002,
the conventional grocery sub-sector lost three per cent market share,
while the convenience sub-sector lost an extraordinary 21 per cent. At
the same time, the club warehouse sector market share grew two per cent,
while the mass merchandiser segment grew nine per cent.

**SUB-SECTOR MARKET SHARE BY CHANNEL**

![](media/image3.wmf)

**SUB-SECTOR MARKET SHARE OF CONSUMER SPENDING**

![](media/image4.wmf) *ACNielsen*

[]{.mark}

As non-traditional retailers pocket more and more consumer food dollars,
grocery retailers are biting back by increasing their offerings to
include general merchandise and extensive drug and beauty products. Some
banners are even surpassing competitors in the one-stop-shopping pursuit
by adding additional services, such as in-store banking and photo
finishing. The convenience trend is driving a majority of retailers to
increase ready-to-eat offerings, including prepared salads, chicken and
sushi. These services are often not offered as a profit builder, but as
a vehicle to drive traffic to stores.

**SUB-SECTOR PENETRATION:**

Grocery banners remain the most visited of food retailers, averaging 97
visits per household each year. Mass merchandisers average only 21.5
visits per household annually, but account for a higher dollar average
spent per trip at \$46.50 compared with grocery at \$39.

Grocery banners also remain the highest sector for total dollars per
household spent at \$3,801. While the warehouse club sector only
generated \$1,156 per household and the mass merchandiser sector
generated \$999, these two sectors are growing at significantly higher
rates \[six per cent and eight per cent, respectively\] than the grocery
sector \[two per cent\].

HOUSEHOLD PENETRATION, 2002

+----------------+---------+----------+-----------+----------+-------+
|                | Ho      | \#       | S         | Sp       | Ch    |
|                | usehold | Trips/   | pend/Trip | end/Year | annel |
|                | Pene    |          |           |          |       |
|                | tration | H        |           |          | Share |
|                |         | ousehold |           |          |       |
+----------------+---------+----------+-----------+----------+-------+
| All Channels   | 100%    | 224.9    | \$37.73   | \        | \$100 |
|                |         |          |           | $8483.82 |       |
+----------------+---------+----------+-----------+----------+-------+
| Grocery        | 100%    | 97.0     | \$39.17   | \        | \     |
| Banners        |         |          |           | $3801.04 | $44.8 |
+----------------+---------+----------+-----------+----------+-------+
| Drug Stores    | 96.2%   | 21.4     | \$26.40   | \$563.91 | \$6.4 |
+----------------+---------+----------+-----------+----------+-------+
| Mass           | 93.0%   | 21.5     | \$46.50   | \$999.21 | \     |
| Merchandisers  |         |          |           |          | $10.9 |
+----------------+---------+----------+-----------+----------+-------+
| Convenience    | 56.5%   | 16.8     | \$12.41   | \$207.81 | \$1.4 |
| Stores         |         |          |           |          |       |
+----------------+---------+----------+-----------+----------+-------+
| Warehouse      | 48.0%   | 11       | \$105.03  | \$       | \$6.5 |
| Clubs          |         |          |           | 1,155.74 |       |
+----------------+---------+----------+-----------+----------+-------+
| All Other Food | 40.1%   | 7.0      | \$25.86   | \$180.46 | \$0.8 |
+----------------+---------+----------+-----------+----------+-------+
| Remaining      |         |          |           |          | \     |
| Channels       |         |          |           |          | $29.2 |
+----------------+---------+----------+-----------+----------+-------+

ACNielsen

Chain share of total food sales increased 3.5 percentage points between
2000 and 2002, increasing from 57.2 per cent of total sales to 60.7 per
cent. Total chain sales for 2002, which combine both grocery and
convenience figures, increased 10 per cent over 2001, reaching nearly
CDN\$37.5 billion. Within that total, it is estimated that convenience
store sales increased to CDN\$3.8 billion from CDN\$3.4 billion in 2001.

Share of independent food sales has been declining, seen in a
2.9-percentage-point decrease between 2001 and 2002 alone. Since 1998,
independent share has dropped 3.5 percentage points from 42.8 to 39.3
per cent. In 2003, it is forecasted to continue dropping, while chains
are expected to continue increasing to 61.1 per cent.

Interestingly, chain store market share across the country generates
more than 65 per cent of sales in every region, with the exception of
Quebec, which only generates 33 per cent market share. Quebec consumers
tend to shop daily and prefer the neighborhood format of store.

CHAIN VS INDEPENDENT MARKET SHARE \[Supermarkets/Convenience\]

Canadian Grocer

Across the country, Ontario generates the most significant market share
of food sales at 31 per cent, consistent with its population base.
Quebec is close behind at 24 per cent; these two powerhouse provinces
own more than 50 per cent market share throughout the entire country.
Lagging behind is British Columbia and Northern Canada at 15 per cent.

**REGIONAL MARKET SHARE \[Supermarkets/Convenience\]**

+---------+------+------+-------+------+----+---------+------+-------+
|         | C    |      |       | Inde |    |         | T    |       |
|         | hain |      |       | pend |    |         | otal |       |
|         | St   |      |       | ents |    |         | Re   |       |
|         | ores |      |       |      |    |         | tail |       |
|         |      |      |       |      |    |         | Food |       |
+---------+------+------+-------+------+----+---------+------+-------+
|         | U    |      | Sales | U    |    | Sales   | U    | Sales |
|         | nits |      |       | nits |    |         | nits |       |
+---------+------+------+-------+------+----+---------+------+-------+
|         | Gro  | Conv | Com   | V    | U  | C       | Regi | Reg   |
|         | cery | en-i | bined | olun | na | ombined | onal | ional |
|         |      | ence | Total | tary | ff | Total   | T    | Total |
|         |      |      |       | Gr   | il |         | otal |       |
|         |      |      | \[0   | oups | -i | \       |      |       |
|         |      |      | 00s\] |      | at | [000s\] |      |       |
|         |      |      |       |      | ed |         |      |       |
+---------+------+------+-------+------+----+---------+------+-------+
| A       | 193  | 1    | \     | 165  | 1  | \$1,    | 3    | \     |
| tlantic |      | ,599 | $4,41 |      | ,5 | 363,080 | ,460 | $5,77 |
| Pr      |      |      | 1,728 |      | 03 |         |      | 4,808 |
| ovinces |      |      |       |      |    |         |      |       |
+---------+------+------+-------+------+----+---------+------+-------+
| Quebec  | 385  | 2    | \     | 1    | 3  | \$9,    | 7    | \$    |
|         |      | ,241 | $5,39 | ,554 | ,1 | 681,992 | ,301 | 15,07 |
|         |      |      | 2,714 |      | 21 |         |      | 4,706 |
+---------+------+------+-------+------+----+---------+------+-------+
| Ontario | 540  | 2    | \$    | 1    | 3  | \$6,    | 6    | \$    |
|         |      | ,116 | 12,26 | ,029 | ,0 | 897,972 | ,697 | 19,16 |
|         |      |      | 6,918 |      | 12 |         |      | 4,890 |
+---------+------+------+-------+------+----+---------+------+-------+
| Ma      | 166  | 492  | \     | 605  | 1  | \$1,    | 2    | \     |
| nitoba/ |      |      | $3,19 |      | ,0 | 334,304 | ,265 | $4,53 |
|         |      |      | 7,221 |      | 02 |         |      | 1,525 |
| Saska   |      |      |       |      |    |         |      |       |
| tchewan |      |      |       |      |    |         |      |       |
+---------+------+------+-------+------+----+---------+------+-------+
| Alberta | 181  | 1    | \     | 320  | 6  | \$2,    | 2    | \     |
|         |      | ,055 | $5,69 |      | 57 | 135,296 | ,213 | $7,82 |
|         |      |      | 4,619 |      |    |         |      | 9,915 |
+---------+------+------+-------+------+----+---------+------+-------+
| British | 326  | 839  | \     | 233  | 8  | \$2,    | 2    | \     |
| Co      |      |      | $6,49 |      | 14 | 851,190 | ,212 | $9,34 |
| lumbia/ |      |      | 6,292 |      |    |         |      | 7,482 |
| North   |      |      |       |      |    |         |      |       |
| Canada  |      |      |       |      |    |         |      |       |
+---------+------+------+-------+------+----+---------+------+-------+
| Canada  | 1    | 8    | \$    | 3    | 10 | \$24,   | 24   | \$    |
|         | ,791 | ,342 | 37,45 | ,906 | ,1 | 263,834 | ,148 | 61,72 |
|         |      |      | 9,492 |      | 09 |         |      | 3,326 |
+---------+------+------+-------+------+----+---------+------+-------+
| \% of   | 7.4% | 3    | 60.7% | 1    | 4  | 39.3%   | 100% | 100%  |
| Total   |      | 4.5% |       | 6.2% | 1. |         |      |       |
|         |      |      |       |      | 9% |         |      |       |
+---------+------+------+-------+------+----+---------+------+-------+

Canadian Grocer

**REGIONAL GROCERY SALES, 2002**

![](media/image5.wmf)

*Canadian Grocer*

## OPPORTUNITIES AND CHALLENGES FACING U.S. EXPORTERS:

  ----------------------------------- -----------------------------------
  Opportunities                       Challenges

  Canada has the fourth-highest       Private label brands continue to
  developed private label franchise   grow in many categories, stealing
  in the world, nearly twice that of  shelf space from national brands.
  the U.S.                            

  Canadian consumers enjoy a high     Due to consolidated landscape,
  disposable income, coupled with a   pricing must be competitive.
  growing interest in global cuisine. Furthermore, lower value of the
                                      Canadian dollar forces Canadian
                                      buyers to demand yet even lower
                                      prices.

  U.S. food products match Canadian   Due to consolidation, often only
  tastes and expectations.            one national buyer per retailer per
                                      category; this national buyer will
                                      often purchase for all banners
                                      under retailer.

  Canada cannot grow certain          Canada has a very high ethnic
  agricultural commodities for the    population with specific dietary
  majority of the year; retailers     preferences. \[The three largest
  dependent on global supply chain    cities consist of more than 1/3 new
  management.                         Canadians\].

  U.S. food manufacturers are         Retailers and brokers/distributors
  currently developing flavor         charge high listing/placement fees.
  profiles not currently seen in the  
  Canadian market.                    

  Canada's strengthening dollar is an Food labeling, including bilingual
  advantage for U.S. exporters.       packaging requirement, and
                                      nutritional content claims highly
                                      regulated.

  Fruit and vegetable consumption in  Canadian retailers demand suppliers
  Canada is substantially higher than utilize latest technology \[bar
  that in the U.S.                    coding, EDI, etc.\]

  Retail consolidation means fewer    Retailers are interested in
  retailers to approach when          category extension, not
  soliciting listing agreements.      cannibalization. Products entering
                                      the market must be innovative; not
                                      "me too."

  Diverse population provides         Category Management is forcing a
  opportunities for specialty         reduction in listings based on a
  products in populated centers.      lack of product performance.

                                      Retailers encourage manufacturers
                                      to execute category management
                                      internally, ultimately increasing
                                      price point at retail.
  ----------------------------------- -----------------------------------

# ROAD MAP FOR MARKET ENTRY

## 

OVERVIEW

U.S. food product manufacturers seeking to enter the Canadian
marketplace have vast opportunities. Canada is the U.S.'s primary
trading partner -- more than 64 per cent market of Canada's manufactured
food imports originate from the U.S. This is a result of a number of
factors, including a convenient shipping corridor and a familiarity
between consumer tastes and expectations.

The retail trade is receptive to imported product; however, manufactured
food products are subject to stringent labeling regulations, which
dissuades many U.S. manufacturers from crossing the border. Furthermore,
the difference in currency and customs procedures may appear
overwhelming.

Overcoming these obstacles is simple with the right tools. Following are
the five main steps for U.S. exporters to take advantage of the
burgeoning Canadian market sector:

1.  Contact your state regional

2.  Locate a broker/distributor; investigate direct sell opportunities
    through Canada Connect

3.  Understand Canadian government standards and regulations

4.  Understand Canadian retail standards

5.  Research competitive marketplace

**STEP ONE: CONTACT YOUR STATE REGIONAL**

U.S. State Regional Offices promote the export of food and other
agricultural products from their respective regions on a global basis.

One of the services these State Regional offices offer is a cost-share
funding program, which assists in promoting branded food products and
agricultural commodities in foreign markets. Funding is provided by the
USDA's Foreign Agricultural Service \[FAS\]. If eligible, the program
provides participants with a 50-per-cent cost reimbursement for certain
eligible marketing and promotional activities, including product
demonstrations, in-store promotion, point-of-sale materials,
advertising, trade show participation, label modification and more.

###### U.S. STATE REGIONAL OFFICES

  ----------------- ----------------------------------- --------------------------------------------------------
  STATE REGIONAL    STATES REPRESENTED                  WEB SITE

  Food Export USA   Connecticut, Delaware, Maine,       [www.foodexportusa.org](http://www.foodexportusa.org/)
                    Massachusetts, New Hampshire, New   
                    Jersey, New York, Pennsylvania,     
                    Rhode Island and Vermont            

  Mid-American      Illinois, Indiana, Iowa, Kansas,    [www.miatco.org](http://www.miatco.org/)
  International     Michigan, Minnesota, Missouri,      
  Agri-Trade        Nebraska, North Dakota, Ohio, South 
  Council           Dakota and Wisconsin                
  \[MIATCO\]                                            

  Southern United   Alabama, Arkansas, Florida,         [www.susta.org](http://www.susta.org/)
  States Trade      Georgia, Kentucky, Louisiana,       
  Association       Maryland, Mississippi, North        
  \[SUSTA\]         Carolina, Oklahoma, South Carolina, 
                    Tennessee, Texas, Virginia, West    
                    Virginia and the Commonwealth of    
                    Puerto Rico                         

  Western U.S.      Alaska, Arizona, California,        [www.wusata.org](http://www.wusata.org/)
  Agricultural      Colorado, Hawaii, Idaho, Montana,   
  Trade Association New Mexico, Oregon, Utah,           
  \[WUSATA\]        Washington, Nevada and Wyoming      
  ----------------- ----------------------------------- --------------------------------------------------------

STEP TWO: LOCATE A BROKER/DISTRIBUTOR; INVESTIGATE DIRECT SELL
OPPORTUNITIES THROUGH THE CANADA CONNECT PROGRAM

Local representation provides exporters with a domestic advantage to
understanding the local, regional and national markets and the
opportunities available. Brokers and distributors provide guidance on
best business practices, sales contacts, market development, logistics
and government regulations. Many also provide merchandising and
marketing programs and their volume purchasing power can help reduce
retail slotting fees.

###### BROKER/DISTRIBUTOR RESOURCES

+-------------+------------------------------+------------------------+
| O           | Service                      | Contact                |
| rganization |                              |                        |
+-------------+------------------------------+------------------------+
| Foreign     | Designed for                 | Canada Connect         |
| A           | U.S.-export-ready companies, | representatives in     |
| gricultural | the FAS program "Canada      | Canada:                |
| Service     | Connect" matches prospective |                        |
| \[FAS\]     | exporters with appropriate   | Branded food products  |
|             | Canadian                     | and agricultural       |
|             | brokers/distributors or      | commodities:           |
|             | buyers by accurately         |                        |
|             | expediting entry into Canada | Faye Clack             |
|             | through market research,     | Communications Inc.    |
|             | competitive analysis and the |                        |
|             | scheduling of buyer          | 905-206-0577           |
|             | appointments.                |                        |
|             |                              | [w                     |
|             |                              | ww.fayeclack.com](http |
|             |                              | ://www.fayeclack.com/) |
|             |                              |                        |
|             |                              | email:                 |
|             |                              | info@fayeclack.com     |
|             |                              |                        |
|             |                              | Wine products:         |
|             |                              |                        |
|             |                              | Ketchin Sales &        |
|             |                              | Marketing              |
|             |                              |                        |
|             |                              | 705-444-5255           |
|             |                              |                        |
|             |                              | rketchin@ketchin.com   |
+-------------+------------------------------+------------------------+
| The Grocery | The Association of Sales &   | [www.asmc.org]         |
| Ma          | Marketing Companies (ASMC)   | (http://www.asmc.org/) |
| nufacturers | merged with the GMA, in      |                        |
| of America  | January 2003. GMA is a       |                        |
| \[GMA\]     | Washington, DC-based         |                        |
|             | voluntary member trade       |                        |
|             | association promoting the    |                        |
|             | interests of approximately   |                        |
|             | 450 sales and marketing      |                        |
|             | agencies and 140             |                        |
|             | manufacturers in the United  |                        |
|             | States, Canada and abroad.   |                        |
|             | Its web site includes a      |                        |
|             | Canadian database of         |                        |
|             | approximately 30             |                        |
|             | brokers/distributors.        |                        |
+-------------+------------------------------+------------------------+
| The         | The Toronto, ON-based CAIE   | www.importers.ca       |
| Canadian    | is Canada\'s key source of   |                        |
| Importers   | information on Canadian      |                        |
| and         | customs and trade policy. It |                        |
| Exporters   | provides Canadian importers  |                        |
| Association | with critical and timely     |                        |
|             | information and effective    |                        |
|             | representation to government |                        |
|             | agencies.                    |                        |
+-------------+------------------------------+------------------------+

#  

**STEP THREE: UNDERSTAND CANADIAN GOVERNMENT REGULATIONS**

There are a number of federal acts and regulations that govern the
importation of food into Canada. The primary federal agencies involved
are the Canadian Food Inspection Agency (CFIA), the Department of
Foreign Affairs and International Trade (DFAIT) and Health Canada (HC).
For more information on the various regulations, please refer to the
agency web sites.

The Canadian Food Inspection Agency \[CFIA\]:

The CFIA provides all federal inspection services related to food
safety, economic fraud, trade-related requirements, and animal and plant
disease and pest programs. The CFIA administers, among others, the
following acts:

-   Canada Agricultural Products Act and Associated Regulations

-   Canadian Food Inspection Agency Act

-   Consumer Packaging and Labeling Act

-   Customs Act

-   Export and Import Permits Act

-   Fish Inspection Act

-   Food and Drug Act

-   Importation of Intoxicating Liquors Act

-   Meat Inspection Act

-   Plant Protection Act

-   Weight and Measures Act

The Food and Drug Act and Regulations is the primary legislation that
applies to all food sold in Canada, whether imported or domestic. This
legislation sets out minimum health and safety requirements, as well as
provisions preventing fraud or deception \[labeling, packaging,
treatment, processing, sales and advertising\].

Food products sold in Canada must comply with bilingual packaging in
English and French. This is pertinent to both labeling and nutritional
information. It is important to note that nutritional fact, ingredient
declarations and health claim labeling regulations are different in
Canada than in the U.S., and U.S. products must comply with Canadian
standards.

######## RELEVANT CANADIAN GOVERNMENT AGENCIES

  ---------------- ------------------------------------ -----------------------------------------------------------------------------
  Government       Function                             Information
  Regulatory                                            
  Organizations                                         

  Canadian Food    Government of Canada's regulator for [www.inspection.gc.ca](http://www.inspection.gc.ca/)
  Inspection       food safety \[along with Health      
  Agency \[CFIA\]  Canada\], animal health and plant    
                   protection.                          

  Canada Customs   Its mission is to promote compliance [www.ccra-adrc.gc.ca](http://www.ccra-adrc.gc.ca/)
  and Revenue      with Canada's tax, trade, border     
  Agency \[CCRA\]  legislation and regulations.         

  Canadian Food    A regulatory document provided by    [www.hc-sc.gc.ca/food](http://www.hc-sc.gc.ca/food)-aliment/
  and Drug Act     Health Canada, which outlines        
                   information regarding specific food  
                   import restrictions.                 

  Health Canada    Administers the Food Safety          [www.hc-sc.gc.ca](http://www.hc-sc.gc.ca/)
                   Assessment Program, which assesses   
                   the effectiveness of the Canadian    
                   Food Inspection Agency\'s activities 
                   related to food safety.              

  Foreign Affairs  Responsible for allocating tariff    [www.dfait-maeci.gc.ca](http://www.dfait-maeci.gc.ca/)/eicb
  and              rate quotas to importers.            
  International                                         
  Trade \[DFAIT\],                                      
  Export & Import                                       
  Controls Bureau                                       

  Measurement      Administers and enforces the Weights [www.strategis.ic.gc.ca](http://www.strategis.gc.ca/)
  Canada           and Measures Act for food labeling   
                   purposes.                            

  Labeling Guide                                        [www.inspection.gc.ca/english/bureau/labeti/guide/guidee.shtml]{.underline}

  Acts &                                                [www.inspection.gc.ca/english/reg/rege.shtml]{.underline}
  Regulations                                           
  ---------------- ------------------------------------ -----------------------------------------------------------------------------

**IMPORT SERVICE CENTRES**

As part of its commitment to improving services for clients, the
Canadian Food Inspection Agency and the Canada Customs and Revenue
Agency \[CCRA\] have established three regional Import Service Centers
\[ISC\] across Canada to assist in processing import request
documentation/data.

In addition, ISC staff manages telephone inquiries regarding import
requirements for all commodities regulated by the CFIA, and when
necessary coordinate inspections for import shipments.

+-----------------------+---------------------+------------------------+
| Import Service Center | Open                | Contact                |
+-----------------------+---------------------+------------------------+
| Eastern ISC           | 7 a.m. to 11 p.m.   | Telephone:             |
|                       |                     | 1-877-493-0468         |
|                       | \[local time\]      | \[within Canada or     |
|                       |                     | U.S.\]\                |
|                       |                     | Fax: 1-514-493-4103    |
+-----------------------+---------------------+------------------------+
| Central ISC           | 7 a.m. to 12 a.m.   | Telephone:             |
|                       |                     | 1-800-835-4486         |
|                       | \[local time\]      | \[within Canada or     |
|                       |                     | U.S.\]\                |
|                       |                     | Fax: 1-905-612-6280    |
+-----------------------+---------------------+------------------------+
| Western ISC           | 7 a.m. to 12 a.m.   | Telephone:             |
|                       |                     | 1-888-732-6222         |
|                       | \[local time\]      | \[within Canada or     |
|                       |                     | U.S.\]\                |
|                       |                     | Fax: 1-604-541-3373    |
+-----------------------+---------------------+------------------------+

**STEP FOUR: UNDERSTAND CANADIAN RETAIL STANDARDS**

The following processes are widely accepted and utilized across all
retail sectors:

  ---------------------- ------------------------------------------------
  Technology/Practice    Description

  Universal Product Code Not mandatory in Canada, nor administered by the
  \[U.P.C.\] or Bar Code Canadian government, virtually all retailers
                         require products to be labelled with a U.P.C.
                         The code is used to track inventory and pricing
                         at the checkout counter. Universal Code Council,
                         Inc. \[UCC\] issues and administers U.P.C. codes
                         \[www.uc-council.org\].

  Electronic Data        Larger retailers demand EDI as their means to
  Interchange \[EDI\]    ordering, invoicing and other procurement
                         activities. Smaller retailers are in transition
                         to usage. EDI is the computer-to-computer
                         exchange of business data in standard formats.

  ECCnet                 Becoming an industry standard, ECCnet is an
                         internet-based catalogue of products, offering
                         trading partners a product data registry that
                         contains all pertinent data, offering one source
                         for data access between suppliers and retailers
                         \[www.eccnet.org\].

  Slotting Fees          Up-front fees paid by suppliers to retailers to
                         guarantee shelf space for new products. Fees
                         that are paid to guarantee shelf space for
                         existing products are referred to as
                         "pay-to-stay" fees. There are no set rates to
                         these fees; pricing determined by the retailer
                         depending on the uniqueness of the product,
                         number of skus already established in the
                         category and the department.
  ---------------------- ------------------------------------------------

STEP FIVE: RESEARCH COMPETITIVE MARKETPLACE

The following chart outlines other organizations not listed previously,
which could be helpful in seeking data related to your product and its
opportunities within the Canadian marketplace:

  --------------------- ---------------------------- -----------------------------------------------
  Organization          Function/Purpose             Information

  Canadian Council of   Represents Canadian          [www.ccgd.magi.com](mailto:www.ccgd@magi.com)
  Grocery Distributors  distributors of food and     
  \[CCGD\]              grocery-related products.    

  Canadian Restaurant   The largest hospitality      [www.crfa.ca](http://www.crfa.ca/)
  and Foodservices      association in Canada.       
  Association                                        

  Canadian Federation   Represents Canada\'s         [www.cfig.ca](http://www.cfig.ca/)
  of Independent        independently owned and      
  Grocers \[CFIG\]      franchised supermarkets.     

  Consumers'            Represents consumers to all  [www.consumer.ca](http://www.consumer.ca/)
  Association of Canada levels of government and to  
                        all sectors of society.      

  Agriculture &         Provides information,        [www.ats.agr.ca](http://www.ats.agr.ca/)
  Agri-Food Canada,     research and technology      
  Agri-Trade Food       policies and programs. Also  
  Service               provides access to           
                        statistics.                  

  Canada Connect        See program description in   www.usembassycanada.gov
                        step 2. This program also    
                        provides competitive         
                        analysis for U.S. food       
                        manufacturers.               

  Statistics Canada     The official source for      [www.statcan.ca](http://www.statcan.ca/)
                        Canadian social and economic 
                        statistics and products.     
  --------------------- ---------------------------- -----------------------------------------------

# MARKET STRUCTURE

## DISTRIBUTION CHANNEL

Imported food product into the Canadian marketplace may route directly
to the retailer or filter through importers, brokers, distributors and
wholesalers. For the convenience store buyer or smaller grocery retail
chain, often the wholesaler is a major grocery retailer, supplying this
smaller volume group through their distribution and wholesale
subsidiaries. In 2002, for example, more than 7,000 outlets purchased
products through Loblaw Companies Inc.'s distribution centers.

In 1999, 25 to 30 per cent of store inventory was delivered directly to
the retailer by the processor. For the larger retailer, the decision to
procure direct or utilize the middle tier is dependent on the
*sub-category of the product, its volume and its shipping corridor. It
is also dependent on what retailer is procuring the product.*

Perishable products, such as dairy, produce, meat, poultry and
value-added items, are often procured direct by the larger retailers.
Some retailers, such as Loblaw Co. Ltd. and Sobeys Inc., employ
procurement offices in the southern U.S. for this purpose. In the
grocery aisles, however, retailers rely heavily on brokers, importers
and distributors.

Efficiency is being sought from both sides of the fence. While the
retailer industry is demanding more products via fewer suppliers, the
broker/distributor industry is responding through aggressive
consolidation. In 1986 the Canadian Food Brokers Association boasted 100
members; in 2001 it had fewer than 45. Today the association no longer
exists, having merged into the Grocery Manufacturers of America, which
lists 30 Canadian agencies.

Larger firms are purchasing smaller brokers/distributors to offer
national coverage, while regional organizations are forming alliances
across the country to stay competitive by offering national coverage.
Agents/distributors focus on head office visits, with larger firms
offering sales force coverage at store level, while smaller firms often
outsource coverage at this level.

Today's growing non-traditional channels are forcing
brokers/distributors to focus additional sales forces on drug stores,
c-stores, g-stores, clubs and mass merchandisers. This is a recent
phenomenon -- previously while some agencies focused on the
non-traditional outlets, others focused solely on the conventional
market. Today many of these companies are adding other value-added
services, such as marketing programs, merchandising and logistical
support to remain competitive.

 

To partner with a broker/distributor, food manufacturers pay a
percentage of the product sales revenue. These costs vary significantly
depending on the type of product line and expected sales volume.
Pioneering product lines will have significant monthly fees until the
products generate enough sales volume to switch to a percentage-of-sales
format.

# RETAIL SUB-SECTORS

## SUPERMARKETS/SUPERSTORES, MASS MERCHANDISERS AND CLUB WAREHOUSE 

Supermarkets remain the most predominant store format in Canada, with
the top three conventional retailers generating 50-per-cent market share
across all food sales; the top five retailers generate 63-per-cent
market share.

This has come as a result of massive consolidation in the marketplace --
first as a means to own the market; then as a response to the emerging
mass merchandiser and club warehouse format arrival.

Employing a multi-format approach, the larger chain retailers diversify
product choices among banners to enable them to strategically target
specific demographics. While some banners focus on deep discounting or
expanded product offerings outside traditional grocery, others focus on
increasing fresh product and value-added services, such as ready-to-eat
foods. Some, particularly smaller retailers, focus on remaining
"neighborhood driven," offering top-line customer service to attract
customers and retain loyalty. All are changing and enhancing strategies
where possible to effectively compete in the new environment.

Furthermore, many chains are expanding their store sizes to the
superstore format in an effort to offer one-stop shopping through a
wider variety of products and services. In late 2003, for example,
Loblaw Cos. Ltd. announced that all Loblaws banner new builds and
conversions moving forward would be in the superstore format to remain
competitive against the growth of Wal-Mart.

Loblaws banner superstores, like other superstore formats in the market,
offer up to 25 per cent general merchandise and a wide variety of
value-added services, such as photo finishing, fitness centers,
dry-cleaning, gas bars, and the latest addition, medical clinics and
self-scanning check-outs. In 2002 the average size of a Loblaw store was
48,900 square feet; that same year, it opened six new stores in Ontario
averaging 120,000 square feet.

While many retailers are expanding banners and offerings, Sobeys Inc.
plans to reduce its current number of banners to four or five,
converting the majority of full-service and fresh-service food stores to
the *Sobeys* banner across the country with the exception of Quebec,
where stores will retain the *IGAextra* banner. Community food stores
across Quebec, Ontario and Western Canada will operate under the *IGA*
banner, while the discount format stores will retain the *Price Chopper*
banner.

Interestingly, while the top three conventional grocery retailers are
growing at a steady rate, the fourth and fifth-placed players are losing
ground, likely due to the extraordinary growth seen by the next two
players in line, Costco and Wal-Mart, which grew at four per cent and an
astounding 22 per cent, respectively, in 2003 alone. Zellers, while last
on the list of the top 10 players, showed significant positive growth of
12 per cent.

This is likely to be further compounded in 2004 by the arrival of Sam's
Club, a club warehouse format owned by Wal-Mart. The first four Canadian
stores will open in the fall of 2003. As many as 10 to 15 are expected
to open in 2004. Wal-Mart is believed to be increasing its rate of
expansion, with an expected 30 stores opening in 2004, marking the
launch of its superstore format in the Canadian market.

**CHAIN MARKET SHARE BY UNITS**

![](media/image6.wmf) *ACNielsen, Homescan Grocery Watch; 52 Weeks to
March 15, 2003, National*

**SUPERMARKETS/SUPERSTORES**

+------------+-------------+-----+-----+----+---------+--------------+
| RETAILER   | PRIMARY     | T   | SA  | NO | LO      | PURCHASING   |
|            | BANNERS     | YPE | LES |    | CATIONS | AGENT TYPE   |
|            |             |     | \   |    |         |              |
|            |             |     | [CD |    |         |              |
|            |             |     | N\] |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| LOBLAW     | All Banners |     | \   | 1  | Across  | Broker,      |
| COMPANIES  |             |     | $23 | ,6 | Canada  | Distributor, |
| LIMITED    |             |     | B   | 97 |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Atlantic    | SM  |     | 56 | NB/NS   |              |
|            | SaveEasy    |     |     |    | /PEI/NF |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Atlantic    | SS  |     | 50 | NS      |              |
|            | Superstore  |     |     |    | /NB/PEI |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Dominion    | SM  |     | 15 | NF      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Extra Foods | SM  |     | 90 | BC/A    |              |
|            |             |     |     |    | B/SK/MB |              |
|            |             |     |     |    | /ON/NWT |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Fortinos    | SS  |     | 18 | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Loblaws     | SM  |     | 98 | ON/QC   |              |
|            |             | /SS |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Lucky       | SM  |     | 1  | BC/A    |              |
|            | Dollar      |     |     | 02 | B/SK/MB |              |
|            | Foods       |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Maxi        | SM  |     | 85 | QC      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | No Frills   | SM  |     | 1  | ON      |              |
|            |             |     |     | 10 |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Provigo     | SM  |     | 1  | QC      |              |
|            |             | /SS |     | 38 |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | The Real    | SS  |     | 57 | BC/     |              |
|            | Canadian    |     |     |    | AB/SK/M |              |
|            | Superstore  |     |     |    | B/ON/YK |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | The Real    | SS  |     | 32 | BC/AB/S |              |
|            | Canadian    |     |     |    | K/MB/ON |              |
|            | Wholesale   |     |     |    |         |              |
|            | Club        |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Shop Easy   | SM  |     | 56 | BC/A    |              |
|            | Foods       |     |     |    | B/SK/MB |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | SuperValu   | SM  |     | 29 | BC/AB   |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Valu-mart   | SM  |     | 71 | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Your        | SS  |     | 54 | ON      |              |
|            | Independent |     |     |    |         |              |
|            | Grocer      |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Zehrs       | SM  |     | 58 | ON      |              |
|            | Markets     | /SS |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Cash &      | V   |     | 5  | BC/AB/S |              |
|            | Carry and   | ari |     | 78 | K/MB/ON |              |
|            | other       | ous |     |    |         |              |
|            | banners     |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| SOBEYS     | All Banners |     | \$  | 1  | Across  | Broker,      |
| INC.       |             |     | 9.7 | ,3 | Canada  | Distributor, |
|            |             |     | B   | 26 |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Garden      | SM  |     | 82 | AB/B    |              |
|            | Market IGA  |     |     |    | C/SK/MB |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | IGA         | SM  |     | 4  | AB/     |              |
|            |             |     |     | 15 | BC/SK/M |              |
|            |             |     |     |    | B/ON/QC |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Food Town   | SM  |     | 82 | AB/NT/S |              |
|            |             |     |     |    | K/MB/ON |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Thrifty     | SM  |     | 2  | SK      |              |
|            | Foods       |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Price       | SM  |     | 1  | MB/O    |              |
|            | Chopper     |     |     | 02 | N/NB/NS |              |
|            |             |     |     |    | /PEI/NF |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Sobeys      | SS  |     | 1  | O       |              |
|            |             |     |     | 40 | N/NB/NS |              |
|            |             |     |     |    | /PEI/NF |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Foodland    | SM  |     | 1  | ON/N    |              |
|            |             |     |     | 04 | B/NS/NF |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Knechtel    | SM  |     | 43 | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | IGA Extra   | SM  |     | 42 | QC      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Les Marches | SM  |     | 24 | QC      |              |
|            | Tradition   |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| CANADA     | Safeway     | SM  | \$  | 2  | BC/AB/S | Broker,      |
| SAFEWAY    |             |     | 5.5 | 10 | K/MB/ON | Distributor, |
| LTD.       |             |     | B   |    |         | Direct       |
|            |             |     |     |    |         |              |
| \          |             |     |     |    |         |              |
| [FOREIGN\] |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| METRO INC. | All Banners |     | \$  | 4  | QC/ON;  | Broker,      |
|            |             |     | 5.1 | 34 | predom  | Distributor, |
| \[LOCAL\]  |             |     | B   |    | inantly | Direct       |
|            |             |     |     |    | Quebec. |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Metro       | SM  |     | 2  | QC      |              |
|            |             |     |     | 51 |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Super C     | SS  |     | 49 | QC/ON   |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Loeb        | SM  |     | 43 | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
| GREAT      | All Banners |     | \$  | 2  | ON      | Broker,      |
| ATLANTIC & |             |     | 4.1 | 39 |         | Distributor, |
| PACIFIC    |             |     | B   |    |         | Direct       |
| COMPANY OF |             |     |     |    |         |              |
| CANADA     |             |     |     |    |         |              |
|            |             |     |     |    |         |              |
| \          |             |     |     |    |         |              |
| [FOREIGN\] |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | A&P         | SM  |     | 88 | ON      |              |
|            |             | /SS |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Dominion    | SM  |     | 57 | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Food Basics | SM  |     | 80 | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Ultra Food  | SM  |     | 5  | ON      |              |
|            | and Drug    |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Barn        | SM  |     | 9  | ON      |              |
+------------+-------------+-----+-----+----+---------+--------------+
| OVERWAITEA | All Banners |     | \$  | 1  | BC/AB   | Broker,      |
| FOOD GROUP |             |     | 2.0 | 03 |         | Distributor, |
|            |             |     | B   |    |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Sa          | SM  |     | 65 | BC/AB   |              |
|            | ve-On-Foods |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Urban Fare  | SM  |     | 2  | BC/AB   |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Overwaitea  | SM  |     | 21 | BC      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Cooper's    | SM  |     | 11 | BC      |              |
|            | Foods       |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | PriceSmart  | SM  |     | 3  | BC      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Bulkley     | SM  |     | 1  | BC      |              |
|            | Valley      |     |     |    |         |              |
|            | Wholesale   |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| CALGARY    | Calgary     | SS  | \$  | 18 | AB      | Broker,      |
| CO         | Co-op       |     | 730 |    |         | Distributor, |
| -OPERATIVE |             |     | M   |    |         | Direct       |
| A          |             |     |     |    |         |              |
| SSOCIATION |             |     |     |    |         |              |
| LIMITED    |             |     |     |    |         |              |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| THRIFTY    | Thrifty     | SM  | \$  | 18 | BC      | Broker,      |
| FOODS      | Foods       | /SS | 360 |    |         | Distributor, |
|            |             |     | M   |    |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| BUY-LOW    | All Banners |     | N/A | 20 | BC/AB   | Broker,      |
| FOODS      |             |     |     |    |         | Distributor, |
| \[LOCAL\]  |             |     |     |    |         | Direct       |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Giant Foods | SM  |     | 2  | BC      |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Shop and    | SM  |     | 2  | BC      |              |
|            | Save        |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Buy-Low     | SM  |     | 14 | BC/AB   |              |
|            | Foods       |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Budget      | SM  |     | 2  | AB      |              |
+------------+-------------+-----+-----+----+---------+--------------+
| COLEMANS   | Colemans    | SM  | N/A | 11 | NF      | Broker,      |
| FOOD       | Food Centre |     |     |    |         | Distributor, |
| CENTRE     |             |     |     |    |         | Direct       |
|            |             |     |     |    |         |              |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| COMMISSO'S | Commisso's  | SM  | N/A | 16 | ON      | Broker,      |
| FOOD       | Food        | /SS |     |    |         | Distributor, |
| MARKETS    | Markets     |     |     |    |         | Direct       |
| LTD.       |             |     |     |    |         |              |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| R.         | Denniger    | SM  | N/A | 7  | ON      | Broker,      |
| DENNIGER   |             |     |     |    |         | Distributor, |
| LTD.       |             |     |     |    |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| HIGHLAND   | Highland    | SM  | N/A | 4  | ON      | Broker,      |
| FARMS INC. | Farms       |     |     |    |         | Distributor, |
| \[LOCAL\]  |             |     |     |    |         | Direct       |
+------------+-------------+-----+-----+----+---------+--------------+
| L&M FOOD   | L&M Food    | SM  | N/A | 5  | ON      | Broker,      |
| MARKETS    | Markets     |     |     |    |         | Distributor, |
| LTD.       |             |     |     |    |         | Direct       |
|            |             |     |     |    |         |              |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| LONGO      | Longo's     | SM  | N/A | 14 | ON      | Broker,      |
| BROTHERS   | Fruit       |     |     |    |         | Distributor, |
| FRUIT      | Markets     |     |     |    |         | Direct       |
| MARKETS    |             |     |     |    |         |              |
| INC.       |             |     |     |    |         |              |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| QUALITY    | Quality     | SM  | N/A | 8  | BC      | Broker,      |
| FOODS      | Foods       |     |     |    |         | Distributor, |
|            |             |     |     |    |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| RABBA FINE | Rabba Fine  | SM  | N/A | 25 | ON      | Broker,      |
| FOODS LTD. | Foods       |     |     |    |         | Distributor, |
|            |             |     |     |    |         | Direct       |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| KITCHEN    | Kitchen     | SM  | N/A | 10 | ON      | Broker,      |
| TABLE      | Table       |     |     |    |         | Distributor, |
| \[LOCAL\]  |             |     |     |    |         | Direct       |
+------------+-------------+-----+-----+----+---------+--------------+

CLUB WAREHOUSE:

+------------+-------------+-----+-----+----+---------+--------------+
| RETAILER   | PRIMARY     | T   | SA  | NO | LO      | PURCHASING   |
|            | BANNERS     | YPE | LES |    | CATIONS | AGENT TYPE   |
|            |             |     | \   |    |         |              |
|            |             |     | [CD |    |         |              |
|            |             |     | N\] |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| COSTCO     | Costco      | WC  | \$  | 60 | Across  | Broker,      |
| CANADA     |             |     | 3.6 |    | Canada  | Distributor, |
| INC.       |             |     | B   |    |         | Direct       |
|            |             |     |     |    |         |              |
| \          |             |     | F   |    |         |              |
| [FOREIGN\] |             |     | ood |    |         |              |
|            |             |     | o   |    |         |              |
|            |             |     | nly |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+

MASS MERCHANDISER:

+------------+-------------+-----+-----+----+---------+--------------+
| RETAILER   | PRIMARY     | T   | SA  | NO | LO      | PURCHASING   |
|            | BANNERS     | YPE | LES |    | CATIONS | AGENT TYPE   |
|            |             |     |     |    |         |              |
|            |             |     | \   |    |         |              |
|            |             |     | [CD |    |         |              |
|            |             |     | N\] |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| WAL-MART   | Wal-Mart    | MM  | \$  | 2  | Across  | Broker,      |
| CANADA     |             |     | 2.8 | 01 | Canada  | Distributor, |
| INC.       |             |     | B   |    |         | Direct       |
|            |             |     |     |    |         |              |
| \          |             |     |     |    |         |              |
| [FOREIGN\] |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| ZELLERS    | Zellers     | MM  | N/A | 3  | Across  | Broker,      |
| IN         |             |     |     | 15 | Canada  | Distributor, |
| CORPORATED |             |     |     |    |         | Direct       |
|            |             |     |     |    |         |              |
| \[LOCAL\]  |             |     |     |    |         |              |
+------------+-------------+-----+-----+----+---------+--------------+
| NORTHWEST  | ALL BANNERS |     | \$  | 1  | Across  | Broker,      |
| COMPANY    |             |     | 333 | 48 | Canada; | Distributor, |
| \[LOCAL\]  |             |     | M   |    | mostly  | Direct       |
|            |             |     |     |    | in      |              |
|            |             |     |     |    | n       |              |
|            |             |     |     |    | orthern |              |
|            |             |     |     |    | rural   |              |
|            |             |     |     |    | areas.  |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | Northern    | MM  |     | 1  | Across  |              |
|            |             |     |     | 35 | N       |              |
|            |             |     |     |    | orthern |              |
|            |             |     |     |    | Canada  |              |
+------------+-------------+-----+-----+----+---------+--------------+
|            | North Marts | MM  |     | 7  | MB/S    |              |
|            |             |     |     |    | K/NF/NV |              |
+------------+-------------+-----+-----+----+---------+--------------+

##  CONVENIENCE STORES, GAS MARTS, KIOSKS

Canada's 8,342 chain convenience stores dot the Canadian landscape from
coast to coast. While many are regional players, the gas bar companies
operate outlets on a national level.

As with the grocery sector, the convenience store industry is altering
its appearance to compete in today's demanding environment. With
drugstores and supermarkets offering increasingly more convenience items
in high-end, visually revamped environments, c-store retailers are being
pushed to change and polish current operating strategies. For gas bars,
competition within the industry is compounded by dwindling fuel profits,
forcing stores to place more emphasis on products and merchandise,
including fresh produce, coffee and prepared foods, to boost profit
margins.

The gas bar chain category is actually one of the most prevalent changes
seen in this sector. Formerly, unbranded and lacking a wide selection of
products, today the gas bar channel is a leader in service offerings,
including branded coffee stations, ready-to-eat bars and take-home
necessities. In an effort to grab a larger share of the convenience
market, Canadian Tire, for example, has plans to aggressively double the
number of stores it operates on a larger level. It is looking to the
U.S. example of Sheetz as its model.

This change has been occurring across the rest of the industry for some
time. Mac's Convenience Stores has partnered with quick-service chains,
such as Subway, to meet the needs of the "dashboard diner," while
Couche-Tard is building a network of smaller stores in high-traffic
areas, such as office buildings and shopping centers to generate higher
sales per square foot. Several of the stores are co-branded with
recognized quick-serve restaurants, further evolving convenience
retailing. Sixty additional in-store restaurants are intended to open in
2003-04.

Traditionally core c-store customers are adults shopping for traditional
convenience products. Today, the teenage market is emerging as a new
focused opportunity. While teenagers visit c-stores more frequently than
adults, they reportedly spend less money. Alimentation Couche-Tard, one
of Canada's leading c-store chain retailers, is capitalizing on this
emerging audience by increasing fast-food offerings and introducing new
products, such as slushies, hoping to garner more of this audience's
disposable income.

CONVENIENCE RETAILERS:

  ----------------- ------------- --------- ------- ----------- ---------------------
  RETAILER          PRIMARY       SALES     NO      LOCATIONS   PURCHASING AGENT TYPE
                    BANNERS       \[CDN\]                       

  ALIMENTATION      All Banners   \$1.3 B   1,791   Across      Broker/Distributor,
  COUCHE-TARD INC.                                  Canada      Direct
  \[LOCAL\]                                                     

                    Couche-Tard             226     QC          

                    Sept-Jours              143     QC          

                    Provi-Soir              312     QC          

                    Winks                   51      ON, NWT, BC 

                    Becker's                202     ON          

                    Daisy Mart              149     ON          

                    Mac's                   567     Across      
                                                    Canada      

                    Mike's Mart             69      ON          

  AVONDALE STORES   All Banners   N/A       119     ON          Broker/Distributor,
  \[LOCAL\]                                                     Direct

                    Avondale                107     ON          

                    Stewart's               1       ON          
                    Farm Market                                 

                    Dollarmart              9       ON          
  ----------------- ------------- --------- ------- ----------- ---------------------

  ----------------- ------------- ------- ------- ------------------- ---------------------
                    Avon-Mart             2       ON                  

  CANADIAN TIRE     Gas Bars      N/A     207     Across Canada       
  CORPORATION                                                         
  \[LOCAL\]                                                           

  FARAH FOODS LTD.  All Banners   N/A     176     ON                  Broker/Distributor,
  \[LOCAL\]                                                           Direct

                    Farah Foods           14      ON                  

                    Hasty Markets         99      ON                  

                    Min-A-Mart            43      ON                  

                    Associates            20      ON                  

  FAS GAS OIL       All Banners   N/A     389     Western Canada      Broker/Distributor,
  \[LOCAL\]                                                           Direct

                    Short Stop            24      AB                  

                    Other FAS             365     Western Canada      
                    Oil, Race                                         
                    Track Fuels                                       
                    and Great                                         
                    Northern Oil                                      

  GOOD NEIGHBOUR    Good          N/A     84      NF                  Broker/Distributor,
  STORES \[LOCAL\]  Neighbors                                         Direct

  HUSKY OIL         All Banners   \$26 M  262     Central/Western     Broker/Distributor,
  MARKETING COMPANY                               Canada              Direct
  \[LOCAL\]                                                           

                    Stop 'n Shop          56      BC/AB/AK/MB/ON      

                    Other                 206     BC/AB/SK/MB/ON/YK   

  IMPERIAL OIL      All Banners   N/A     707     Across Canada       Broker/Distributor,
  \[LOCAL\]                                                           Direct

                    On the Run            147     Across Canada       

                    Tiger Express         286     Across Canada       

                    Other                 274     Across Canada       

  IRVING            Stores with   N/A     230     QC/Eastern Canada   Broker/Distributor,
  CONVENIENCE       Irving Gas                                        Direct
  STORES \[LOCAL\]  Bars                                              

  LAND'S HAPPY      Happy Mart    \$9.2 M 6       AB                  Broker/Distributor,
  MARTS LTD.                                                          Direct
  \[LOCAL\]                                                           

  LITTLE SHORT STOP Little Short  N/A     35      ON                  Broker/Distributor,
  STORES LIMITED    Stop                                              Direct
  \[LOCAL\]                                                           

  NORTH WEST        Quickstop             6       MB/NF/ON/NV         Broker/Distributor,
  COMPANY \[LOCAL\]                                                   Direct

  PETRO-CANADA      SuperStop     N/A     1,501   Across Canada       Broker/Distributor,
  C-STORE DIVISION                                                    Direct
  \[LOCAL\]                                                           

  PRONTO FOOD MARTS Pronto        N/A     28      ON                  Broker/Distributor,
  \[LOCAL\]                                                           Direct

  QUICKIE           Quickie       N/A     40      ON/QC               Broker/Distributor,
  CONVENIENCE                                                         Direct
  \[LOCAL\]                                                           

  RED CIRCLE        Red Circle    \$25 M  57      NF                  Broker/Distributor,
  \[LOCAL\]                                                           Direct

  7-ELEVEN INC.     7-Eleven      \$1 B   491     BC/MB/SK/ON/AB      Broker/Distributor,
  \[FOREIGN\]                                                         Direct

  SHELL CANADA      All Banners   N/A     444     Across Canada       Broker/Distributor,
  LIMITED \[LOCAL\]                                                   Direct

                    Select                262     Across Canada       

                    Turbo Mini            81      BC/AB/SK/MB         
                    Convenience                                       

                    Payless               37      BC                  
                    Convenience                                       

                    Beaver Gas            64      ON                  
                    Bar                                               

  SOBEYS INC.       All Banners   N/A     225     QC/Eastern Canada   
  \[LOCAL\]                                                           

                    Needs                 128     NB/NS/PEI/NF        Broker/Distributor,
                                                                      Direct

                    Marche                97      QC                  
                    Bonichoix                                         
  ----------------- ------------- ------- ------- ------------------- ---------------------

## INDEPENDENT GROCERS:

In 2002 independent stores dropped in number from 15,299 to 14,015,
representing a decrease of 8.4 per cent. Of this, unaffiliated store
earning increased 0.9 per cent, while franchised store earnings
decreased 0.4 per cent.

With the strength of the chain sector, unaffiliated independents find it
challenging to procure at reasonable prices, coupled with the added
constraint of differentiating themselves from the rest of the market.

# COMPETITION

+----------+-----------+--------------------+--------------------------+
| Product  | Major     | Strengths of Key   | Advantages/disadvantages |
| Category | Supply    | Supply Countries   | of                       |
|          | Sources   |                    |                          |
|          |           |                    | Local Suppliers          |
+----------+-----------+--------------------+--------------------------+
| *        | 1.        | -   New Zealand    | -   Canadian tariff rate |
| *DAIRY** |  European |     imports are    |     quotas stipulate a   |
|          |     Union |     strong in      |     50-per-cent dairy    |
| NET      |           |     whole milk     |     content guideline    |
| IMPORTS: | \[France; |     powder, with   |     for imported         |
|          |           |     imports        |     product, resulting   |
| CDN\$540 |    Italy; |     doubling since |     in the creation of   |
| MILLION  |     G     |     1999.          |     ingredients and      |
|          | ermany\]: |                    |     blend products that  |
|          |     35%   | -   More than 62   |     are designed to      |
|          |           |     per cent of    |     circumvent this      |
|          | 2.  New   |     imports from   |     guideline.           |
|          |           |     the European   |     Butter-oil-sugar     |
|          |  Zealand: |     Union are      |     blends are imported  |
|          |     27%   |     specialty      |     tariff-free,         |
|          |           |     cheeses.       |     displacing Canadian  |
|          | 3.  U.S.: |                    |     milk for ice cream.  |
|          |     23%   | -   The U.S. is    |     Since 1995, market   |
|          |           |     strong in whey |     has seen an increase |
|          |           |     products.      |     in imports of        |
|          |           |                    |     butter-oil blends of |
|          |           |                    |     557 %. Imports of    |
|          |           |                    |     flavored milk (e.g.  |
|          |           |                    |     chocolate,           |
|          |           |                    |     strawberry) which is |
|          |           |                    |     also imported        |
|          |           |                    |     tariff-free,         |
|          |           |                    |     increased almost 3 ½ |
|          |           |                    |     times in the 3 years |
|          |           |                    |     ending 2002.         |
+----------+-----------+--------------------+--------------------------+
| **SNACK  | 1.  U.S.: | -   Imports of     | -   The snack food       |
| FOODS**  |     88%   |     snack food     |     industry serves      |
|          |           |     increased 655  |     primarily the        |
| NET      | 2.        |     % between 1988 |     domestic market.     |
| IMPORTS: |   Brazil: |     and 1998, with |                          |
|          |     2%    |     the bulk       | -   The industry is      |
| CDN\$214 |           |     arriving from  |     highly concentrated  |
| MILLION  | 3         |     the U.S.       |     with the leading     |
|          | .  India: |                    |     four companies       |
|          |     2%    | -   Ohio is by far |     producing 89.4 per   |
|          |           |     the largest    |     cent of the value of |
|          |           |     exporter of    |     shipments.           |
|          |           |     snack foods to |                          |
|          |           |     Canada,        | -   Key commodity inputs |
|          |           |     accounting for |     needed to make snack |
|          |           |     32 per cent of |     food products        |
|          |           |     total imports  |     supplied             |
|          |           |     from the U.S.  |     domestically.        |
|          |           |                    |                          |
|          |           | -   The U.S.       | -   Food labeling        |
|          |           |     produces a     |     regulations hinders  |
|          |           |     large array of |     both imported and    |
|          |           |     flavors,       |     exported product.    |
|          |           |     brands and     |                          |
|          |           |     varieties of   | -   From 1988 to 1997,   |
|          |           |     snacks not yet |     manufacturing        |
|          |           |     available in   |     shipments of snack   |
|          |           |     the Canadian   |     food products almost |
|          |           |     market.        |     doubled \[86 per     |
|          |           |                    |     cent\].              |
|          |           |                    |                          |
|          |           |                    | -   Retail consolidation |
|          |           |                    |     means increased      |
|          |           |                    |     competition in       |
|          |           |                    |     finding shelf space. |
+----------+-----------+--------------------+--------------------------+
| **B      | 1.  U.S.: | -   Since the      | -   Canadian market      |
| REAKFAST |     94%   |     implementation |     highly competitive,  |
| C        |           |     of NAFTA, U.S. |     with more than 100   |
| EREALS** | 2.        |     exports of     |     brands seen on       |
|          |  Germany: |     cereal         |     supermarket shelves. |
| NET      |     2%    |     products have  |                          |
| IMPORTS: |           |     increased at   | -   Ready-to-eat         |
|          | 3.  U.K.: |     an average     |     breakfast cereals    |
| CDN\$324 |     1%    |     annual rate of |     are the number 1     |
| MILLION  |           |     eight per      |     choice of Canadian   |
|          |           |     cent.          |     consumers at         |
|          |           |                    |     breakfast, averaging |
|          |           |                    |     91 meal              |
|          |           |                    |     opportunities per    |
|          |           |                    |     consumer per year.   |
+----------+-----------+--------------------+--------------------------+
| **RED    | 1.  U.S.: | -   These imports  | -   A single case of Mad |
| MEAT**   |     91%   |     fill the       |     Cow disease has      |
|          |           |     shortage in    |     instilled consumer   |
| NET      | 2.        |     Canadian       |     fear and led to      |
| IMPORTS: |   Brazil: |     supply (e.g.,  |     reduced production   |
|          |     3%    |     ribs, loins    |     in 2003. Has also    |
| CDN\$197 |           |     and steaks) at |     resulted in foreign  |
| MILLION  | 3.  A     |     competitive    |     bans on shipments.   |
|          | rgentina: |     prices.        |                          |
|          |     3%    |                    | -   Tariff-regulated     |
|          |           | -   Brazil is one  |     industry.            |
|          |           |     of world's     |                          |
|          |           |     main beef      |                          |
|          |           |     producers.     |                          |
|          |           |     Brazil has     |                          |
|          |           |     benefited from |                          |
|          |           |     currency       |                          |
|          |           |     devaluations,  |                          |
|          |           |     low production |                          |
|          |           |     costs and      |                          |
|          |           |     recent         |                          |
|          |           |     investment to  |                          |
|          |           |     expand         |                          |
|          |           |     production     |                          |
|          |           |     capacity.      |                          |
+----------+-----------+--------------------+--------------------------+

+----------+-----------+--------------------+--------------------------+
| **P      | 1.  U.S.: | -   The U.S. is    | -   To remain            |
| OULTRY** |     99%   |     the world's    |     competitive, the top |
|          |           |     largest        |     five Canadian        |
| NET      |           |     producer and   |     poultry associations |
| IMPORTS: |           |     exporter of    |     partnered in 2002 to |
|          |           |     poultry meat.  |     form the Canadian    |
| CDN\$380 |           |     It is also the |     Poultry Research     |
| MILLION  |           |     world's        |     Council \[CPRC\].    |
|          |           |     largest turkey |                          |
|          |           |     producer.      | -   Poultry production   |
|          |           |                    |     and processing are   |
|          |           |                    |     among the most       |
|          |           |                    |     highly mechanized    |
|          |           |                    |     sectors in Canadian  |
|          |           |                    |     agriculture:         |
|          |           |                    |     25,000-broiler       |
|          |           |                    |     chickens/hour are    |
|          |           |                    |     prepared in poultry  |
|          |           |                    |     processing plants.   |
|          |           |                    |                          |
|          |           |                    | -   Tariff-regulated     |
|          |           |                    |     industry.            |
+----------+-----------+--------------------+--------------------------+
| **EGGS & | 1.  U.S.: | -   The U.S. egg   | -   Canada's egg         |
| EGG      |     100%  |     industry fills |     industry operates    |
| PR       |           |     Canada's needs |     under an orderly     |
| ODUCTS** |           |     when supply is |     marketing policy     |
|          |           |     low            |     framework that is    |
| NET      |           |     \[seasonal\].  |     designed to          |
| IMPORTS: |           |                    |     encourage production |
|          |           |                    |     of a sufficient      |
| CDN\$48  |           |                    |     volume of eggs to    |
| MILLION  |           |                    |     meet market needs.   |
|          |           |                    |                          |
|          |           |                    | -   Tariff-regulated     |
|          |           |                    |     industry.            |
+----------+-----------+--------------------+--------------------------+
| **FISH & | 1.  U.S.: | -   Almost 35 per  | -   Surrounded by the    |
| S        |     28%   |     cent of the    |     Arctic, Atlantic and |
| EAFOOD** |           |     volume \[and   |     Pacific Oceans and   |
|          | 2.        |     four per cent  |     home to the Great    |
| NET      | Thailand: |     of the value\] |     Lakes, Canada is one |
| IMPORTS: |     20%   |     of imports are |     of the world's key   |
|          |           |     products not   |     suppliers in salmon  |
| CDN\$1.6 | 3         |     for human      |     and shellfish.       |
| BILLION  | .  China: |     consumption;   |                          |
|          |     9%    |     most of this   | -   Atlantic fisheries   |
|          |           |     is meal used   |     account for 82 per   |
|          | 4.        |     in the         |     cent of total catch  |
|          |   Norway: |     manufacture of |     in the marketplace.  |
|          |     5%    |     livestock and  |                          |
|          |           |     fish feed.     | -   The total value of   |
|          |           |                    |     finfish represents   |
|          |           |     -   The        |     90 per cent of the   |
|          |           |         majority   |     total value of       |
|          |           |         of imports |     aquaculture          |
|          |           |         for human  |     production.          |
|          |           |                    |                          |
|          |           |        consumption |                          |
|          |           |         is         |                          |
|          |           |         tropical   |                          |
|          |           |         shrimp.    |                          |
+----------+-----------+--------------------+--------------------------+
| **FRUITS | VE        | -   The U.S.       | -   Agriculture is       |
| &        | GETABLES: |     benefits from  |     Canada's             |
| VEGE     |           |     export access  |     second-largest       |
| TABLES** | 1.  U.S.: |     into Canada    |     natural              |
|          |     79%   |     during         |     resource-based       |
| NET      |           |     Canada's       |     industry. Canada is  |
| IMPORTS: | 2.        |     winter or      |     a world leader in    |
|          |   Mexico: |     non-growing    |     the development of   |
| **VEGET  |     11%   |     months.        |     programs to manage   |
| ABLES**: |           |                    |     the hazards that may |
|          | FRUIT:    | -   Mexico is      |     affect food          |
| CDN\$1.9 |           |     gaining ground |     production.          |
| BILLION  | 1.  U.S.: |     due to lower   |                          |
|          |     43%   |     prices and its | -   Canada has a         |
| **       |           |     growers        |     thriving greenhouse  |
| FRUIT**: | 2         |     ability to     |     sub sector and some  |
|          | .  Chile: |     meet Canadian  |     of the most advanced |
| CDN\$2.3 |     7%    |     retail needs   |     storage technologies |
| BILLION  |           |     with respect   |     in the world.        |
|          | 3.        |     to packaging   |                          |
| [        | Colombia: |     and quality.   | -   Potatoes, sweet corn |
| ]{.mark} |     7%    |                    |     and green peas are   |
|          |           |                    |     the most extensively |
|          | 4.  Costa |                    |     grown vegetables.    |
|          |     Rica: |                    |                          |
|          |     5%    |                    | -   Seasonality poses a  |
|          |           |                    |     constraint to        |
|          | 5.        |                    |     growers; Canada      |
|          |   Mexico: |                    |     imports 80 per cent  |
|          |     4%    |                    |     of its fresh         |
|          |           |                    |     vegetables between   |
|          |           |                    |     November and June.   |
+----------+-----------+--------------------+--------------------------+
| **NUTS** | 1.  U.S.: | -   The number 1   | -   While there are      |
|          |     59%   |     horticultural  |     approximately 100    |
| NET      |           |     export from    |     types of nut plants  |
| IMPORTS: | 2.        |     the U.S. to    |     that Canada could    |
|          | Thailand: |     Canada is      |     grow, the climate    |
| CDN\$766 |     6%    |     almonds. U.S.  |     prevents most nuts   |
| MILLION  |           |     walnut imports |     from growing in any  |
|          | 3         |     to Canada      |     quantity. BC has an  |
|          | .  China: |     increased 43   |     emerging hazelnut    |
|          |     5%    |     per cent in    |     industry worth \$0.5 |
|          |           |     2002.          |     million annually.    |
|          | 4.        |                    |                          |
|          |   Brazil: | -   Chinese        |                          |
|          |     3.2%  |     walnuts hold a |                          |
|          |           |     strong, but    |                          |
|          |           |     rapidly        |                          |
|          |           |     declining      |                          |
|          |           |     market share   |                          |
|          |           |     in Canada.     |                          |
+----------+-----------+--------------------+--------------------------+

+----------+-----------+--------------------+--------------------------+
| **BEV    | 1.  U.S.: | -   Canada is the  | -   Canada's most        |
| ERAGES** |     26%   |     largest export |     popular distilled    |
|          |           |     market for     |     sprit is whiskey or  |
| NET      | 2.        |     California     |     rye.                 |
| IMPORTS: |   France: |     wine.          |                          |
|          |     21%   |                    |                          |
| CDN\$2   |           |                    |                          |
| BILLION  | 3         |                    |                          |
|          | .  Italy: |                    |                          |
|          |     11%   |                    |                          |
|          |           |                    |                          |
|          | 4.  A     |                    |                          |
|          | ustralia: |                    |                          |
|          |     7%    |                    |                          |
+----------+-----------+--------------------+--------------------------+
| *        | 1.  U.S.: | -   The U.S. is a  | -   Nursery is the       |
| *NURSERY |     50%   |     leader in      |     fastest growing      |
| PR       |           |     world          |     market segment in    |
| ODUCTS** | 2.  South |     production and |     Canadian             |
|          |           |     marketing of   |     agriculture.         |
| NET      |  America: |     flowers, cut   |                          |
| IMPORTS: |     25%   |     foliage,       |                          |
|          |           |     potted plants, |                          |
| CDN\$346 | 3.        |     bedding plants |                          |
| MILLION  |   Europe: |     and turf       |                          |
|          |     22%   |     grass. Total   |                          |
|          |           |     area for       |                          |
|          |           |     floriculture   |                          |
|          |           |     crop           |                          |
|          |           |     production is  |                          |
|          |           |     911 million    |                          |
|          |           |     square feet.   |                          |
|          |           |                    |                          |
|          |           | -   South America  |                          |
|          |           |     is strong in   |                          |
|          |           |     cut flowers    |                          |
|          |           |     and flower     |                          |
|          |           |     buds.          |                          |
|          |           |                    |                          |
|          |           | -   Europe is      |                          |
|          |           |     strong in      |                          |
|          |           |     bulbs,         |                          |
|          |           |     particularly   |                          |
|          |           |     from the       |                          |
|          |           |     Netherlands.   |                          |
+----------+-----------+--------------------+--------------------------+
| **PET    | 1.  U.S:  | -   A few large    | -   The industry is      |
| FOOD**   |     98%   |     U.S. owners    |     virtually            |
|          |           |     that supply    |     self-regulated. The  |
| \[DOG &  |           |     primarily      |     Veterinary Medical   |
| CAT\]    |           |     their own      |     Association and the  |
|          |           |     brands of pet  |     Pet Food Association |
| NET      |           |     food to the    |     of Canada do not set |
| IMPORTS: |           |     marketplace    |     minimum standards    |
|          |           |     control the    |     for pet food         |
| CDN\$375 |           |     Canadian pet   |     processing, and the  |
| MILLION  |           |     food industry. |     industry has faced   |
|          |           |                    |     open criticism for   |
|          |           |                    |     its lack of quality. |
+----------+-----------+--------------------+--------------------------+

# BEST PRODUCT PROSPECTS:

## PRODUCTS PRESENT IN THE MARKET WITH GOOD SALES POTENTIAL:

Based on ACNielsen Categories valued at CDN\$100 million or more
annually and with growth of greater than five per cent.

\*Tariff Rate may include "within-access commitment" and "over-access
commitment\" levels.

**\***Within access commitments, NAFTA allows most food products
originating from the U.S. to enter Canada tariff free with a qualified
certificate of origin. Over-access tariff rates and anti-dumping duties
may be applicable. Contact the Canada Customs and Revenue Agency for
more detailed information on your specific product.

<table style="width:100%;">
<colgroup>
<col style="width: 14%" />
<col style="width: 0%" />
<col style="width: 12%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 12%" />
<col style="width: 19%" />
<col style="width: 0%" />
<col style="width: 23%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="2">Product Category<a href="#fn1" class="footnote-ref"
id="fnref1" role="doc-noteref"><sup>1</sup></a></td>
<td>2001 Market CDN<a href="#fn2" class="footnote-ref" id="fnref2"
role="doc-noteref"><sup>2</sup></a></td>
<td colspan="2">2001 Imports<a href="#fn3" class="footnote-ref"
id="fnref3" role="doc-noteref"><sup>3</sup></a></td>
<td colspan="2">5-Year Average Annual Import Growth<a href="#fn4"
class="footnote-ref" id="fnref4"
role="doc-noteref"><sup>4</sup></a></td>
<td>Import Tariff Rate*</td>
<td colspan="2">Key Constraints Over Market Development</td>
<td>Attractiveness for U.S. Exporters</td>
</tr>
<tr class="even">
<td colspan="3">MEAT AND MEAT PREPARATIONS</td>
<td colspan="2">$1.6B</td>
<td colspan="2">7.1%</td>
<td></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2">Deli Meat</td>
<td><p>$962M</p>
<p>Change Over 2000:</p>
<p>10%</p></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td><p>9.5% to 12.5%</p>
<p>Free from U.S.</p></td>
<td colspan="2"><ul>
<li><p>Meat is regulated by a supply management system of domestic
production quotas and import TRQs.</p></li>
</ul></td>
<td><ul>
<li><p>Fresh and Cured Meats and Poultry ranked second behind dairy in
grocery sales, and is among the fastest-growing segments in the entire
grocery store.</p></li>
</ul></td>
</tr>
<tr class="even">
<td colspan="2">Fresh Meats</td>
<td><p>$4.4B</p>
<p>Change Over 2000:</p>
<p>8%</p></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td><p>Range includes Free to 165%</p>
<p>-Beef, Pork, Lamb</p>
<p>Free From U.S.</p></td>
<td colspan="2"><ul>
<li><p>85% of the TRQ for beef and veal is allocated to New Zealand and
Australia.</p></li>
<li><p>All commercial shipments of imported meat are inspected on
entry.</p></li>
</ul></td>
<td><ul>
<li><p>Pork and poultry consumption is on the rise.</p></li>
<li><p>The U.S. is an approved country for export of meat and meat
products to Canada.</p></li>
<li><p>Fresh Meats is one of seven leading segments representing more
than 40 per cent of total grocery sales.</p></li>
</ul></td>
</tr>
<tr class="odd">
<td colspan="3">FISH AND MARINE ANIMALS</td>
<td colspan="2">$1.9M</td>
<td colspan="2">4.6%</td>
<td></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2"><p>Frozen Pre-packaged Fish/</p>
<p>Seafood</p></td>
<td><p>$3.4M</p>
<p>Change Over 2000: 14%</p></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td><p>Range includes Free to 7%</p>
<p>Free From U.S.</p></td>
<td colspan="2"><ul>
<li><p>Fish and Fish Products are regulated by a supply management
system of domestic production quotas and import TRQs.</p></li>
<li><p>All fish and fish products imported into Canada are
inspected.</p></li>
</ul></td>
<td><ul>
<li><p>Fish consumption is on the rise, increasing nine per cent between
1997 and 2001.</p></li>
<li><p>74% of the “’A’ List of Good Compliance Processors” are U.S.
companies.</p></li>
</ul></td>
</tr>
<tr class="odd">
<td>Canned Fish/ Seafood</td>
<td colspan="2"><p>$300M</p>
<p>Change Over 2000: 7%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"><p>Range includes 2% to 7%</p>
<p>Free from U.S.</p></td>
<td><ul>
<li><p>Importers of RTE and canned products must have documentation that
indicates safe product.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>See above.</p></li>
</ul></td>
</tr>
<tr class="even">
<td colspan="3">FRESH FRUITS AND BERRIES</td>
<td>$1.8B</td>
<td colspan="2">3.5%</td>
<td colspan="2"></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Fresh Fruit</td>
<td colspan="2"><p>$2.1B</p>
<p>Change Over 2000: 9%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"><p>Range includes Free to 10.5%</p>
<p>Free from U.S.</p></td>
<td><ul>
<li><p>Stringent grade requirements for 13 fruit products.</p></li>
<li><p>A USDA inspection certificate is required for the shipment of
apples from the U.S.</p></li>
<li><p>Increased international trade has resulted in a surge in growth
of less traditional fruits and vegetables, such as guavas, mangos and
kiwis.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>Due to climate, Canada is dependent on fruit grown elsewhere
throughout the majority of the year.</p></li>
<li><p>Fresh Produce, along with Fresh and Cured Meats and Poultry, is
among the fastest-growing segments in the grocery store.</p></li>
<li><p>Fresh Fruit is one of seven leading segments representing more
than 40 per cent or total grocery sales.</p></li>
</ul></td>
</tr>
<tr class="even">
<td colspan="3">FRESH VEGETABLES</td>
<td>$1.5B</td>
<td colspan="2">5.2%</td>
<td colspan="2"></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Fresh Vegetables</td>
<td colspan="2"><p>$2.3B</p>
<p>Change Over 2000: 9%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"><p>Range includes Free to 12.5%</p>
<p>Free from U.S.</p></td>
<td><ul>
<li><p>Stringent grade requirements for 17 vegetable products.</p></li>
<li><p>A USDA inspection certificate required for shipment of U.S.
onions and potatoes.</p></li>
<li><p>Increased international trade has resulted in a surge in growth
of less traditional vegetables, such as Chinese cabbage, garlic and
leeks.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>Due to climate, Canada is dependent on vegetables grown elsewhere
throughout the majority of the year.</p></li>
<li><p>Fresh Produce is among the fastest-growing segments in the
grocery store.</p></li>
<li><p>Fresh Vegetables is one of seven leading segments representing
more than 40 per cent or total grocery sales.</p></li>
</ul></td>
</tr>
<tr class="even">
<td colspan="3">OTHER VEGETABLE AND VEGETABLE PREPARATIONS</td>
<td>$1.1B</td>
<td colspan="2">4.3%</td>
<td colspan="2"></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Refrigerated Bagged Salads</td>
<td colspan="2"><p>$143M</p>
<p>Change Over 2000: 16%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"><p>8%</p>
<p>Free from U.S.</p></td>
<td><ul>
<li><p>A few major distributors currently dominate the
marketplace.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>A leading category with some of the fastest sales increases
within the perishables segment, reflective of increased demand for
convenience.</p></li>
</ul></td>
</tr>
<tr class="even">
<td colspan="3">SUGAR AND SUGAR PREPARATIONS</td>
<td>$1.2B</td>
<td colspan="2">2.9%</td>
<td colspan="2"></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Expanded Chocolate Bar Market</td>
<td colspan="2"><p>$194M</p>
<p>Change Over 2000: 7%</p></td>
<td>$430M</td>
<td colspan="2"></td>
<td colspan="2"><p>6%</p>
<p>Free From U.S.</p></td>
<td><ul>
<li><p>Stringent regulatory requirements for packaging materials and
labeling represent a significant input cost.</p></li>
<li><p>Highly fragmented market.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>Market increasing for family- and snack-size
multi-packs.</p></li>
</ul></td>
</tr>
<tr class="even">
<td>Total Pre-packaged Fresh Dessert</td>
<td colspan="2"><p>$401M</p>
<p>Change Over 2000: 11%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2">Based on product composition.</td>
<td><ul>
<li><p>Perishability demands short shipping corridors.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>Consumers seeking homemade flavor profile with convenient RTE
desserts to satisfy demand for a moderate amount of indulgence.</p></li>
</ul></td>
</tr>
<tr class="odd">
<td colspan="3">OTHER CEREALS AND CEREAL PREPARATIONS</td>
<td>$1.4B</td>
<td colspan="2">5.0%</td>
<td colspan="2"></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Frozen Baked Goods</td>
<td colspan="2"><p>$112M</p>
<p>Change Over 2000: 7%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2">Based on product composition.</td>
<td></td>
<td colspan="2"><ul>
<li><p>Increased consumer demand for convenience and innovation,
including an increased demand for artisan breads.</p></li>
</ul></td>
</tr>
<tr class="odd">
<td>Snack Foods</td>
<td colspan="2"><p>$659</p>
<p>Change Over 2000: 9%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"><p>Range includes 2% to 11%</p>
<p>Free from U.S.</p></td>
<td><ul>
<li><p>Low profit margins on snack foods coupled with low Canadian
dollar make importing snack foods challenging.</p></li>
</ul></td>
<td colspan="2"><ul>
<li><p>The U.S. produces a large array of flavors, brands and varieties
of snacks not available in Canada.</p></li>
<li><p>The strongest increases in the dry grocery segment include Snack
Products, which also boast ranking in the top-three single-largest sales
for dry grocery.</p></li>
</ul></td>
</tr>
<tr class="even">
<td colspan="3">BEVERAGE</td>
<td>$1.9B</td>
<td colspan="2">7.2%</td>
<td colspan="2"></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Shelf Stable Juices/Drinks/Nectars and RTS Tea</td>
<td colspan="2"><p>$1B</p>
<p>Change Over 2000: 9%</p></td>
<td></td>
<td colspan="2"></td>
<td colspan="2"><p>Range includes Free to 12.5%</p>
<p>Free from U.S.</p></td>
<td></td>
<td colspan="2"><ul>
<li><p>Ranked fourth for single-largest sales reported for the dry
grocery segment. Among individual product categories, the fastest
growing non-perishables include shelf stable grape juice.</p></li>
<li><p>Canada is dependent on imports of fresh and frozen fruit juices
to meet total market demand. Canada is the U.S. number one
market.</p></li>
</ul></td>
</tr>
</tbody>
</table>
<aside id="footnotes" class="footnotes footnotes-end-of-document"
role="doc-endnotes">
<hr />
<ol>
<li id="fn1"><p>Retail Sales Data 2001, Consumer Expenditures, ACNielsen
Canada.<a href="#fnref1" class="footnote-back"
role="doc-backlink">↩︎</a></p></li>
<li id="fn2"><p>Retail Sales Data 2001, Consumer Expenditures, ACNielsen
Canada.<a href="#fnref2" class="footnote-back"
role="doc-backlink">↩︎</a></p></li>
<li id="fn3"><p>Imports by Major Group, pg. 16, Food Statistics 2001,
Statistics Canada.<a href="#fnref3" class="footnote-back"
role="doc-backlink">↩︎</a></p></li>
<li id="fn4"><p>Imports by Major Group, pg. 16, Food Statistics 2001,
Statistics Canada.<a href="#fnref4" class="footnote-back"
role="doc-backlink">↩︎</a></p></li>
</ol>
</aside>

+---------+--------+-----+-----+--------+------------+---------------+
| Frozen  | \$186M |     |     | 6%     |            |               |
| Drinks  |        |     |     |        |            |               |
| In      | Change |     |     | Free   |            |               |
| cluding | Over   |     |     | from   |            |               |
| Ades/   | 2000:  |     |     | U.S.   |            |               |
| Mixers/ | 10%    |     |     |        |            |               |
|         |        |     |     |        |            |               |
| Iced    |        |     |     |        |            |               |
| Tea     |        |     |     |        |            |               |
| \[not   |        |     |     |        |            |               |
| j       |        |     |     |        |            |               |
| uices\] |        |     |     |        |            |               |
+---------+--------+-----+-----+--------+------------+---------------+
| Bottled | \$184M |     |     | Range  | -   A few  | -             |
| Water   |        |     |     | in     |     major  |   Consumption |
|         | Change |     |     | cludes |     di     |               |
| \[Less  | Over   |     |     | Free   | stributors |    increasing |
| than 18 | 2000:  |     |     | to 11% |            |     10 per    |
| L\]     | 36%    |     |     |        |  currently |     cent per  |
|         |        |     |     | Free   |            |     year.     |
|         |        |     |     | from   |   dominate |               |
|         |        |     |     | U.S.   |     the    |    Per-capita |
|         |        |     |     |        |     m      |               |
|         |        |     |     |        | arketplace |  consumption, |
|         |        |     |     |        |     with   |     however,  |
|         |        |     |     |        |            |     much      |
|         |        |     |     |        |  consumer- |     lower     |
|         |        |     |     |        | recognized |     than in   |
|         |        |     |     |        |            |     U.S.,     |
|         |        |     |     |        |    brands. |     creating  |
|         |        |     |     |        |            |     an        |
|         |        |     |     |        |            |               |
|         |        |     |     |        |            |   opportunity |
|         |        |     |     |        |            |     for       |
|         |        |     |     |        |            |     entry.    |
|         |        |     |     |        |            |               |
|         |        |     |     |        |            | -   Bottled   |
|         |        |     |     |        |            |     Water     |
|         |        |     |     |        |            |     boasts    |
|         |        |     |     |        |            |     one of    |
|         |        |     |     |        |            |     the       |
|         |        |     |     |        |            |     fastest   |
|         |        |     |     |        |            |     growing   |
|         |        |     |     |        |            |               |
|         |        |     |     |        |            |    categories |
|         |        |     |     |        |            |     on retail |
|         |        |     |     |        |            |     shelves.  |
+---------+--------+-----+-----+--------+------------+---------------+
| MISCEL  |        |     |     |        |            |               |
| LANEOUS |        |     |     |        |            |               |
| EDIBLE  |        |     |     |        |            |               |
| PREPA   |        |     |     |        |            |               |
| RATIONS |        |     |     |        |            |               |
+---------+--------+-----+-----+--------+------------+---------------+
| P       | \$176M |     |     | 11%    | -   Strong | -   New       |
| ourable |        |     |     |        |            |     flavor    |
| Salad   | Change |     |     | Free   |   national |               |
| Dr      | Over   |     |     | from   |     brand  | opportunities |
| essings | 2000:  |     |     | U.S.   |     market |     to        |
|         | 6%     |     |     |        |     leader |     continue  |
|         |        |     |     |        |     exists |     to        |
|         |        |     |     |        |     with   |     satisfy   |
|         |        |     |     |        |     str    |     changing  |
|         |        |     |     |        | engthening |     consumer  |
|         |        |     |     |        |     market |     demand    |
|         |        |     |     |        |     share  |     for       |
|         |        |     |     |        |     for    |     variety.  |
|         |        |     |     |        |            |               |
|         |        |     |     |        |    private |               |
|         |        |     |     |        |     label. |               |
|         |        |     |     |        |            |               |
|         |        |     |     |        | -   R      |               |
|         |        |     |     |        | estrictive |               |
|         |        |     |     |        |            |               |
|         |        |     |     |        |    listing |               |
|         |        |     |     |        |     fees   |               |
|         |        |     |     |        |     in     |               |
|         |        |     |     |        |            |               |
|         |        |     |     |        |    grocery |               |
|         |        |     |     |        |     aisle. |               |
+---------+--------+-----+-----+--------+------------+---------------+
| Ketchup | \$103M |     |     | 12.5%  |            | -   Canada's  |
|         |        |     |     |        |            |               |
|         | Change |     |     | Free   |            |   foodservice |
|         | Over   |     |     | from   |            |     industry  |
|         | 2000:  |     |     | U.S.   |            |     is        |
|         | 6%     |     |     |        |            |     importing |
|         |        |     |     |        |            |     more      |
|         |        |     |     |        |            |     ketchup   |
|         |        |     |     |        |            |     to meet   |
|         |        |     |     |        |            |     growing   |
|         |        |     |     |        |            |     demand,   |
|         |        |     |     |        |            |     creating  |
|         |        |     |     |        |            |     sharp     |
|         |        |     |     |        |            |     gains for |
|         |        |     |     |        |            |     U.S.      |
|         |        |     |     |        |            |     products. |
+---------+--------+-----+-----+--------+------------+---------------+

##  PRODUCTS NOT PRESENT IN SIGNIFICANT QUANTITIES BUT WITH GOOD POTENTIAL 

Based on Categories valued at CDN\$30 million or less annually and with
growth of greater than 10 per cent.

\*Tariff Rate may include "within-access commitment" and "over-access
commitment\" levels.

**\***Within access commitments, NAFTA allows most food products
originating from the U.S. to enter Canada tariff free with a qualified
certificate of origin. Over-access tariff rates and anti-dumping duties
may be applicable. Contact the Canada Customs and Revenue Agency for
more detailed information on your specific product.

+--------+------+-----+-----+-------+--------------+----------------+
| P      | 2001 | 2   | 5-Y | I     | Key          | Attractiveness |
| roduct | Ma   | 001 | ear | mport | Constraints  | for U.S.       |
| Catego | rket | Im  | A   | T     | Over Market  |                |
| ry[^1] | CDN  | por | ver | ariff | Development  |                |
|        | [^2] | ts[ | age | R     |              |                |
|        |      | ^3] | Imp | ate\* |              |                |
|        |      |     | ort |       |              |                |
|        |      |     | G   |       |              |                |
|        |      |     | row |       |              |                |
|        |      |     | th[ |       |              |                |
|        |      |     | ^4] |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| MEAT   |      | \$1 | 7   |       |              |                |
| AND    |      | .6B | .1% |       |              |                |
| MEAT   |      |     |     |       |              |                |
| PREP.  |      |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Beef   | \    |     |     | Free  | -   Meat and | -   The U.S.   |
| Jerky  | $20M |     |     |       |     meat     |     is an      |
|        |      |     |     |       |     products |     approved   |
|        | Ch   |     |     |       |     are      |     country    |
|        | ange |     |     |       |              |     for export |
|        | Over |     |     |       |    regulated |     of meat    |
|        | 2    |     |     |       |     by       |     and meat   |
|        | 000: |     |     |       |     supply   |     products   |
|        |      |     |     |       |              |     to Canada. |
|        | 32%  |     |     |       |   management |                |
|        |      |     |     |       |     system   | -   Among the  |
|        |      |     |     |       |     of       |     fastest    |
|        |      |     |     |       |     domestic |     annual     |
|        |      |     |     |       |              |     product    |
|        |      |     |     |       |   production |     sales      |
|        |      |     |     |       |     quotas   |     growth     |
|        |      |     |     |       |     and      |                |
|        |      |     |     |       |     import   |   representing |
|        |      |     |     |       |     TRQs.    |     consumer   |
|        |      |     |     |       |              |     demand for |
|        |      |     |     |       | -   All      |                |
|        |      |     |     |       |              |   convenience, |
|        |      |     |     |       |   commercial |     variety,   |
|        |      |     |     |       |              |                |
|        |      |     |     |       |    shipments |  healthfulness |
|        |      |     |     |       |     of       |     and        |
|        |      |     |     |       |     imported |                |
|        |      |     |     |       |     meat are |    indulgence. |
|        |      |     |     |       |              |                |
|        |      |     |     |       |    subjected |                |
|        |      |     |     |       |     to       |                |
|        |      |     |     |       |              |                |
|        |      |     |     |       |   monitoring |                |
|        |      |     |     |       |     and/or   |                |
|        |      |     |     |       |              |                |
|        |      |     |     |       |   inspection |                |
|        |      |     |     |       |     on entry |                |
|        |      |     |     |       |     from an  |                |
|        |      |     |     |       |     approved |                |
|        |      |     |     |       |     country  |                |
|        |      |     |     |       |     of       |                |
|        |      |     |     |       |     origin.  |                |
+--------+------+-----+-----+-------+--------------+----------------+
| FISH   |      | \$1 | 4   |       |              |                |
| AND    |      | .9M | .6% |       |              |                |
| MARINE |      |     |     |       |              |                |
| A      |      |     |     |       |              |                |
| NIMALS |      |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Refrig | \    |     |     | 7%    | -            | -   Among the  |
| erated | $15M |     |     |       |    Importers |     fastest    |
| Imi    |      |     |     | Free  |     of RTE   |     annual     |
| tation | Ch   |     |     | from  |     and      |     product    |
| S      | ange |     |     | U.S.  |     canned   |     sales      |
| eafood | Over |     |     |       |     products |     growth     |
|        | 2    |     |     |       |     must     |                |
|        | 000: |     |     |       |     have     |   representing |
|        |      |     |     |       |     d        |     consumer   |
|        | 26%  |     |     |       | ocumentation |     demand for |
|        |      |     |     |       |     that     |                |
|        |      |     |     |       |              |   convenience, |
|        |      |     |     |       |    indicates |     variety,   |
|        |      |     |     |       |     safe     |                |
|        |      |     |     |       |     product. |  healthfulness |
|        |      |     |     |       |              |     and        |
|        |      |     |     |       |              |                |
|        |      |     |     |       |              |    indulgence. |
|        |      |     |     |       |              |                |
|        |      |     |     |       |              | -   74% of the |
|        |      |     |     |       |              |     "'A' List  |
|        |      |     |     |       |              |     of Good    |
|        |      |     |     |       |              |     Compliance |
|        |      |     |     |       |              |                |
|        |      |     |     |       |              |    Processors" |
|        |      |     |     |       |              |     are U.S.   |
|        |      |     |     |       |              |     companies. |
+--------+------+-----+-----+-------+--------------+----------------+

+--------+------+-----+-----+-------+--------------+----------------+
| OTHER  |      | \$1 | 4   |       |              |                |
| VEG    |      | .1B | .3% |       |              |                |
| ETABLE |      |     |     |       |              |                |
| AND    |      |     |     |       |              |                |
| VEG    |      |     |     |       |              |                |
| ETABLE |      |     |     |       |              |                |
| PREPAR |      |     |     |       |              |                |
| ATIONS |      |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| P      | \$2M |     |     | Free  |              | -   Among the  |
| ickled |      |     |     |       |              |     f          |
| Mixed  | Ch   |     |     |       |              | astest-growing |
| Vege   | ange |     |     |       |              |     individual |
| tables | Over |     |     |       |              |     product    |
|        | 2    |     |     |       |              |     categories |
|        | 000: |     |     |       |              |     for        |
|        |      |     |     |       |              |                |
|        | 33%  |     |     |       |              | non-perishable |
|        |      |     |     |       |              |     fo         |
|        |      |     |     |       |              | ods/beverages. |
+--------+------+-----+-----+-------+--------------+----------------+
| Canned | \    |     |     | 8%    |              |                |
| Beans  | $11M |     |     |       |              |                |
| --     |      |     |     | Free  |              |                |
| Rem    | Ch   |     |     | from  |              |                |
| aining | ange |     |     | U.S.  |              |                |
| \[not  | Over |     |     |       |              |                |
| Baked  | 2    |     |     |       |              |                |
| B      | 000: |     |     |       |              |                |
| eans\] |      |     |     |       |              |                |
|        | 14%  |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| SUGAR  |      | \$1 | 2   |       |              |                |
| AND    |      | .2B | .9% |       |              |                |
| SUGAR  |      |     |     |       |              |                |
| PREPAR |      |     |     |       |              |                |
| ATIONS |      |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Mini   | \$7M |     |     | 9.5%  |              |                |
| Mints  |      |     |     |       |              |                |
|        | Ch   |     |     | Free  |              |                |
|        | ange |     |     | from  |              |                |
|        | Over |     |     | U.S.  |              |                |
|        | 2    |     |     |       |              |                |
|        | 000: |     |     |       |              |                |
|        |      |     |     |       |              |                |
|        | 40%  |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Boxed  | \    |     |     | 6%    | -   Most     | -   Category   |
| Choc   | $63M |     |     |       |     boxed    |     shows      |
| olates |      |     |     | Free  |              |     growth,    |
|        | Ch   |     |     | from  |   chocolates |     meeting    |
|        | ange |     |     | U.S.  |     are sold |     consumer   |
|        | Over |     |     |       |     as gifts |     demand for |
|        | 2    |     |     |       |     for      |     a moderate |
|        | 000: |     |     |       |     special  |     amount of  |
|        |      |     |     |       |              |                |
|        | 15%  |     |     |       |   occasions. |    indulgence. |
+--------+------+-----+-----+-------+--------------+----------------+
| Li     | \    |     |     | 10%   |              |                |
| corice | $24M |     |     |       |              |                |
|        |      |     |     | Free  |              |                |
|        | Ch   |     |     | from  |              |                |
|        | ange |     |     | U.S.  |              |                |
|        | Over |     |     |       |              |                |
|        | 2    |     |     |       |              |                |
|        | 000: |     |     |       |              |                |
|        |      |     |     |       |              |                |
|        | 12%  |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| OTHER  |      | \$1 | 5   |       |              |                |
| C      |      | .4B | .0% |       |              |                |
| EREALS |      |     |     |       |              |                |
| AND    |      |     |     |       |              |                |
| CEREAL |      |     |     |       |              |                |
| PREPAR |      |     |     |       |              |                |
| ATIONS |      |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Frozen | \    |     |     | Based | -   A few    | -   Increased  |
| Bread/ | $16M |     |     | on    |     major    |     demand for |
| Rolls/ |      |     |     | pr    |              |                |
|        | Ch   |     |     | oduct | distributors |    convenience |
| Dough  | ange |     |     | co    |              |     and        |
|        | Over |     |     | mposi |    currently |     changing   |
|        | 2    |     |     | tion. |     dominate |                |
|        | 000: |     |     |       |     the      |    perceptions |
|        |      |     |     | Free  |     market.  |     and        |
|        | 21%  |     |     | from  |              |                |
|        |      |     |     | U.S.  |              |    lifestyles. |
+--------+------+-----+-----+-------+--------------+----------------+
| Bread  | \$   | []{ | []{ | Based | []{.mark}    |                |
| and    | 8.7M | .ma | .ma | on    |              |                |
| Corn   |      | rk} | rk} | pr    |              |                |
| Flake  | Ch   |     |     | oduct |              |                |
| Crumbs | ange |     |     | co    |              |                |
|        | Over |     |     | mposi |              |                |
|        | 2    |     |     | tion. |              |                |
|        | 000: |     |     |       |              |                |
|        |      |     |     | Free  |              |                |
|        | 11%  |     |     | from  |              |                |
|        |      |     |     | U.S.  |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| BE     |      | \$1 | 7   |       |              |                |
| VERAGE |      | .9B | .2% |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Rice   | \$4M |     |     | 11%   | []{.mark}    | -   Increased  |
| Drinks |      |     |     |       |              |     demand for |
|        | Ch   |     |     | Free  |              |                |
|        | ange |     |     | from  |              |    convenience |
|        | Over |     |     | U.S.  |              |     and        |
|        | 2    |     |     |       |              |     changing   |
|        | 000: |     |     |       |              |                |
|        |      |     |     |       |              |    perceptions |
|        | 26%  |     |     |       |              |     and        |
|        |      |     |     |       |              |                |
|        |      |     |     |       |              |    lifestyles. |
|        |      |     |     |       |              |     Increased  |
|        |      |     |     |       |              |     popularity |
|        |      |     |     |       |              |     of         |
|        |      |     |     |       |              |     dairy-free |
|        |      |     |     |       |              |     diets.     |
+--------+------+-----+-----+-------+--------------+----------------+
| Soya   | \    |     |     | 11%   | []{.mark}    | -   See above. |
| Drinks | $57M |     |     |       |              |                |
|        |      |     |     | Free  |              |                |
|        | Ch   |     |     | from  |              |                |
|        | ange |     |     | U.S.  |              |                |
|        | Over |     |     |       |              |                |
|        | 2    |     |     |       |              |                |
|        | 000: |     |     |       |              |                |
|        |      |     |     |       |              |                |
|        | 28%  |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| M      |      |     |     |       |              |                |
| ISCELL |      |     |     |       |              |                |
| ANEOUS |      |     |     |       |              |                |
| EDIBLE |      |     |     |       |              |                |
| PREPAR |      |     |     |       |              |                |
| ATIONS |      |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Liquid | \$3M |     |     | Range |              |                |
| Seas   |      |     |     | inc   |              |                |
| onings | Ch   |     |     | ludes |              |                |
|        | ange |     |     | 8% to |              |                |
|        | Over |     |     | 9.5%  |              |                |
|        | 2    |     |     |       |              |                |
|        | 000: |     |     | Free  |              |                |
|        |      |     |     | from  |              |                |
|        | 28%  |     |     | U.S.  |              |                |
+--------+------+-----+-----+-------+--------------+----------------+
| Seas   | \    |     |     | 8%    |              |                |
| onings | $43M |     |     |       |              |                |
| Inc    |      |     |     | Free  |              |                |
| luding | Ch   |     |     | from  |              |                |
| Salad  | ange |     |     | U.S.  |              |                |
| T      | Over |     |     |       |              |                |
| oppers | 2    |     |     |       |              |                |
|        | 000: |     |     |       |              |                |
|        |      |     |     |       |              |                |
|        | 11%  |     |     |       |              |                |
+--------+------+-----+-----+-------+--------------+----------------+

## 

## 

## PRODUCTS FACING SIGNIFICANT BARRIERS:

Due to the complexity of the legislative requirements, it is recommended
to contact a Canadian Food Inspection Agency Import Service Centre to
obtain complete and current information regarding your specific product.
The Canadian Food Inspection Agency is responsible for the inspection of
food products at all levels of trade. Following are the restrictions
that could inhibit certain products from entering the country:

Tariff Rate Quota \[TRQ\]:

Under the General Agreement on Tariffs and Trade \[GATT\], with a supply
management system in place for certain commodities, Canada is permitted
to control and limit imports. With the signing of the World Trade
Organization's \[WTO\] Agreement on agriculture in December 1993, Canada
converted its existing agricultural quantitative import controls to a
system of tariff rate quotas \[TRQs\] which came into effect in 1995.

Under the TRQ system, product up to a certain volume is imported at the
"within access commitment" tariff rate. Over this permitted level the
"over-access commitment" tariff rate escalates. These higher tariffs
enable Canada to maintain its system of orderly supply management for
certain agricultural products.

The method for establishing the allocation of import access quantities
is prescribed in the *Export and Import Permits Act* and administered by
the Export and Import Controls Bureau \[EICB\] of the Department of
Foreign Affairs and International Trade \[DFAIT\]. Documentation on the
allocation system and principle of TRQ allocation, together with data on
permits issued can be found at: www.dfait-maeci.gc.ca/eicb/.

Issuance and control of import quota is administered by the EICB in
collaboration with the Customs arm of Revenue Canada.

U.S. products that fall into this category include:

+------------------------------------+---------------------------------+
| -   Broiler hatching chicks and    | -   Chicken                     |
|     eggs                           |                                 |
|                                    | -   Butter                      |
| -   Turkey                         |                                 |
|                                    | -   Buttermilk                  |
| -   Cheese                         |                                 |
|                                    | -   Dairy Blends                |
| -   Milk and Cream                 |                                 |
|                                    | -   Margarine                   |
| -   Yoghurt                        |                                 |
|                                    | -   Eggs                        |
| -   Ice Goods                      |                                 |
+------------------------------------+---------------------------------+

# 

Health Canada

Health Canada continues to develop standards and policies for the safety
of the food supply, which are applied by the Canadian Food Inspection
Agency.

All foods sold in Canada are subject to the *Food and Drugs Act and
Regulations*, which contains health and safety requirements, labeling
requirements and provisions preventing deception and fraud. However,
many agricultural and fish products are also subject to other
legislation. Consequently, the need for licensing, permits and
certificates depends upon the type of food being imported and, in some
cases, on the country or area from which the food is imported. It should
be noted that in some provinces there are additional requirements for
certain foods, such as dairy products, margarine, bottled water and
maple syrup.

The *Food and Drug Regulations* outlines specifications and further
requirements for standardized and non-standardized products. Specific
division regulations outline requirements for standardized products,
while non-standardized products must also conform to standards for each
of the following:

# 

Food Additives: In the absences of specifications under the *Food and
Drug Regulations*, food additives must conform to specifications in the
Food Chemicals Codex (as required by Section B.01.045 of the *Food and
Drug Regulations*).

# 

Food Color: Synthetic food colors are the only additives that must be
certified by the Health Products and Food Branch, Health Canada before
being used in foods. Regulations concerning food colors are listed in
Division 6, and Table III of Division 16 of the *Food and Drugs
Regulation*.

Foods for Special Dietary Use, Including Weight Loss: The composition
and labeling of foods for special dietary use are regulated under
Division 24 of the *Food and Drugs Regulations*.

> *Example: Becel Pro-activ margarine, containing plant sterols, is not
> allowed in Canada.*
>
> **Novel Foods**: The *Novel Food Regulations* under the *Food and
> Drugs Act and Regulations* (Division 28) establishes a clear and
> stringent process for evaluating the safety of novel foods.
> Manufacturers and importers of novel foods are required to notify
> Health Canada of their intention to market a new product in Canada,
> before sale or advertisement for sale. This pre-market notification
> permits Health Canada to conduct a thorough safety assessment of the
> proposed product.
>
> *Example: Red Bull, an energy drink containing amino acids,
> carbohydrates and caffeine, and sold in virtually every country, is
> not allowed in Canada.*
>
> **Sports Nutrition Products**: Canada has very specific compositional
> and labeling requirements for foods, and strictly controls the
> addition of vitamins, minerals and amino acids to foods. Many sports
> nutritional products produced outside the country do not comply with
> the compositional and labeling requirements contained in the *Food and
> Drug Regulation*. Some products, because of their composition or
> because they bear drug claims, are considered drugs and require a Drug
> Identification Number \[DIN\] from the Therapeutic Products
> Directorate, Health Canada, before they can be sold in Canada.
>
> *Example: Tropicana orange juice with calcium added features a drug
> identification number on every bottle.*

# CONTACTS

GOVERNMENT ORGANIZATIONS

+----------------------+-----------------------------------------------+
| Agriculture and      | Agriculture and Agri-Food Canada\             |
| Agri-Food Canada     | Sir John Carling Building\                    |
|                      | 930 Carling Ave.\                             |
|                      | Ottawa, ON K1A 0C5                            |
|                      |                                               |
|                      | Tel.: (613) 759-1000\                         |
|                      | Fax: (613) 759-6726\                          |
|                      | Email: <info@agr.gc.ca>                       |
|                      |                                               |
|                      | Web: [www.agr.gc.ca](http://www.agr.gc.ca/)   |
+----------------------+-----------------------------------------------+
| Statistics Canada    | Statistical Reference Centre (National        |
|                      | Capital Region)\                              |
|                      | R.H. Coats Building, Lobby\                   |
|                      | Holland Ave.\                                 |
|                      | Ottawa, ON K1A 0T6                            |
|                      |                                               |
|                      | Tel: (613) 951-8116                           |
|                      |                                               |
|                      | Email:                                        |
|                      | [infostats@statcan.ca](http:/                 |
|                      | /www.statcan.ca/cgi-bin/COMMENTS/taloncomment |
|                      | .pl?referer=http://www.statcan.ca/start.html) |
|                      |                                               |
|                      | Web: [www.statcan.ca](http://www.statcan.ca/) |
+----------------------+-----------------------------------------------+
| Department of        | > Department of Foreign Affairs and           |
| Foreign Affairs and  | > International Trade\                        |
| International Trade  | > 125 Sussex Dr.\                             |
|                      | > Ottawa, ON K1A 0G2                          |
|                      | >                                             |
|                      | > Tel: (613) 944-4000                         |
|                      | >                                             |
|                      | > Fax: (613) 996-9709                         |
|                      | >                                             |
|                      | > Email: <enqserv@dfait-maeci.gc.ca>          |
|                      |                                               |
|                      | Web:                                          |
|                      | [www.dfai                                     |
|                      | t-maeci.gc.ca](http://www.dfait-maeci.gc.ca/) |
+----------------------+-----------------------------------------------+
| Canada Customs and   | Commissioner of the CCRA\                     |
| Revenue Agency       | 555 MacKenzie Ave., 6th Floor\                |
|                      | Ottawa ON  K1A 0L5                            |
|                      |                                               |
|                      | Tel: (613) 952-3741                           |
|                      |                                               |
|                      | Fax: (613) 941-2505                           |
|                      |                                               |
|                      | Web:                                          |
|                      | [www.                                         |
|                      | ccra-adrc.gc.ca](http://www.ccra-adrc.gc.ca/) |
+----------------------+-----------------------------------------------+
| Industry Canada      | Enquiry Services\                             |
|                      | Communications and Marketing Branch, Industry |
|                      | Canada\                                       |
|                      | C.D. Howe Building, Second Floor, West Tower\ |
|                      | 235 Queen St. Ottawa ON  K1A 0H5              |
|                      |                                               |
|                      | Tel: (613) 947-7466                           |
|                      |                                               |
|                      | Fax: (613) 954-6436**\                        |
|                      | **Email: strategis@ic.gc.ca                   |
|                      |                                               |
|                      | Web: [www.ic.gc.ca](http://www.ic.gc.ca/)     |
+----------------------+-----------------------------------------------+
| Canadian Food        | Canadian Food Inspection Agency\              |
| Inspection Agency    | 59 Camelot Dr.\                               |
|                      | Ottawa, ON K1A 0Y9                            |
|                      |                                               |
|                      | Tel: (613) 225-2342\                          |
|                      | Fax: (613) 228-6125                           |
|                      |                                               |
|                      | Email:                                        |
|                      | [cfia                                         |
|                      | master@inspection.gc.ca](http://www.inspectio |
|                      | n.gc.ca/english/tools/feedback/commene.shtml) |
|                      |                                               |
|                      | Web:                                          |
|                      | [www.in                                       |
|                      | spection.gc.ca](http://www.inspection.gc.ca/) |
+----------------------+-----------------------------------------------+

+----------------------+-----------------------------------------------+
| Health Canada        | Health Canada\                                |
|                      | A.L. 0900C2\                                  |
|                      | Ottawa, ON K1A 0K9\                           |
|                      | Tel: (613) 957-2991\                          |
|                      | Fax: (613) 941-5366                           |
|                      |                                               |
|                      | Email: <info@hc-sc.gc.ca>                     |
|                      |                                               |
|                      | Web:                                          |
|                      | [www.hc-sc.gc.ca](http://www.hc-sc.gc.ca/)    |
+----------------------+-----------------------------------------------+

INDUSTRY ASSOCIATIONS

+------------------------+---------------------------------------------+
| Canadian Federation of | Canadian Federation of Independent Grocers  |
| Independent Grocers    |                                             |
|                        | 2235 Sheppard Ave. East, Suite 902          |
|                        |                                             |
|                        | Willowdale, ON M2J 5B5                      |
|                        |                                             |
|                        | > Tel: (416) 492-2311                       |
|                        |                                             |
|                        | Fax: (416) 492-2347                         |
|                        |                                             |
|                        | Email: info@cfig.ca                         |
|                        |                                             |
|                        | Web: [www.cfig.ca](http://www.cfig.ca/)     |
+------------------------+---------------------------------------------+
| Canadian Council of    | Canadian Council of Grocery Distributors    |
| Grocery Distributors   |                                             |
|                        | Place du Parc\                              |
|                        | 300 Léo Pariseau, Suite 1101\               |
|                        | Montréal, Québec H2X 4B3\                   |
|                        | Tel: (514) 982-0267\                        |
|                        | Fax: (514) 982-0659                         |
|                        |                                             |
|                        | Email:                                      |
|                        | [w                                          |
|                        | ebmaster@ccgd.ca](mailto:kmckinnon@ccgd.ca) |
|                        |                                             |
|                        | Web: [www.ccgd.ca](http://www.ccgd.ca/)     |
+------------------------+---------------------------------------------+
| Canadian Produce       | Canadian Produce Marketing Association      |
| Marketing Association  |                                             |
| \[CPMA\]               | 9 Corvus Court                              |
|                        |                                             |
|                        | Ottawa, ON K2E 7Z4                          |
|                        |                                             |
|                        | Tel: (613) 226-4187                         |
|                        |                                             |
|                        | Email: <question@cpma.ca>                   |
|                        |                                             |
|                        | Web: www.cpma.ca                            |
+------------------------+---------------------------------------------+
| Fruit and Vegetable    | Fruit and Vegetable Dispute Resolution      |
| Dispute Resolution     | Corporation                                 |
| Corporation \[FVDRC\]  |                                             |
|                        | Building 75, Central Experimental Farm\     |
|                        | 930 Carling Avenue\                         |
|                        | Ottawa, ON K1A 0C6\                         |
|                        | Tel: 613 234-0982\                          |
|                        | Fax: 613 234-8036\                          |
|                        | E-mail: <info@fvdrc.com>                    |
|                        |                                             |
|                        | Web: www.fvdrc.com                          |
+------------------------+---------------------------------------------+
| Food and Consumer      | Food and Consumer Product Manufactures of   |
| Product Manufactures   | Canada                                      |
| of Canada              |                                             |
|                        | 885 Don Mills Rd. Ste. 301                  |
|                        |                                             |
|                        | Toronto, ON M3C 1V9                         |
|                        |                                             |
|                        | Tel: (416) 510-8024                         |
|                        |                                             |
|                        | Fax: (416) 510-8043                         |
|                        |                                             |
|                        | Email: <info@fcpmc.com>                     |
|                        |                                             |
|                        | Web: [www.fcpmc.com](http://www.fcpmc.com/) |
+------------------------+---------------------------------------------+
| ACNielsen Canada       | ACNielsen Canada                            |
|                        |                                             |
|                        | 160 McNabb Street                           |
|                        |                                             |
|                        | Markham, ON L3R 4B8                         |
|                        |                                             |
|                        | Tel: (905) 475-3344                         |
|                        |                                             |
|                        | Fax: (905) 475-8357                         |
|                        |                                             |
|                        | Web:                                        |
|                        | [                                           |
|                        | www.acnielsen.ca](http://www.acnielsen.ca/) |
+------------------------+---------------------------------------------+

PUBLICATIONS

+------------------------+---------------------------------------------+
| Food in Canada         | Food in Canada\                             |
|                        | Rogers Media\                               |
|                        | One Mount Pleasant Rd., 7th Floor           |
|                        |                                             |
|                        | Toronto, ON M4Y 2Y5                         |
|                        |                                             |
|                        | Tel: (416) 764-1502\                        |
|                        | Fax: (416) 764-1755                         |
|                        |                                             |
|                        | Email: <seagle@rmpublishing.com>            |
|                        |                                             |
|                        | Web:                                        |
|                        | [www.bizlink.com                            |
|                        | /food.htm](http://www.bizlink.com/food.htm) |
+------------------------+---------------------------------------------+
| Canada Grocer          | Canadian Grocer                             |
|                        |                                             |
|                        | Rogers Media                                |
|                        |                                             |
|                        | One Mount Pleasant Rd.                      |
|                        |                                             |
|                        | Toronto, ON M4Y 2Y5                         |
|                        |                                             |
|                        | Tel: 1-800-268-9119                         |
|                        |                                             |
|                        | Fax: (416) 764-1523                         |
|                        |                                             |
|                        | Email:                                      |
|                        | <jerry.tutunjian@canadiangrocer.rogers.com> |
|                        |                                             |
|                        | Web:                                        |
|                        | [www.bizlink.com/cangrocer                  |
|                        | .htm](http://www.bizlink.com/cangrocer.htm) |
+------------------------+---------------------------------------------+
| Foodservice and        | Foodservice and Hospitality                 |
| Hospitality            |                                             |
|                        | 101-23 Lesmill Road\                        |
|                        | Don Mills, ON M3B 3P6\                      |
|                        | Tel: (416) 447-0888\                        |
|                        | Fax: (416) 447-5333                         |
|                        |                                             |
|                        | Email: <rcaira@foodservice.ca>              |
|                        |                                             |
|                        | Web:                                        |
|                        | [www.foodse                                 |
|                        | rvice.ca](http://www.foodserviceworld.com/) |
+------------------------+---------------------------------------------+
| C-Store Canada         | C-Store Canada                              |
|                        |                                             |
|                        | 1839 Inkster Blvd.                          |
|                        |                                             |
|                        | Winnipeg, MB R2X 1R3                        |
|                        |                                             |
|                        | Tel: (204) 954-2085                         |
|                        |                                             |
|                        | Fax: (204) 954-2057                         |
|                        |                                             |
|                        | Email: <mp@mercury.mb.ca>                   |
|                        |                                             |
|                        | Web:                                        |
|                        | [www                                        |
|                        | .mercury.mb.ca](http://www.mercury.mb.cal/) |
+------------------------+---------------------------------------------+
| Western Grocer         | Western Grocer                              |
|                        |                                             |
|                        | 1839 Inkster Blvd.                          |
|                        |                                             |
|                        | Winnipeg, MB R2X 1R3                        |
|                        |                                             |
|                        | Tel: (204) 954-2085                         |
|                        |                                             |
|                        | Fax: (204) 954-2057                         |
|                        |                                             |
|                        | Email: <mp@mercury.mb.ca>                   |
|                        |                                             |
|                        | Web:                                        |
|                        | [www                                        |
|                        | .mercury.mb.ca](http://www.mercury.mb.cal/) |
+------------------------+---------------------------------------------+

ADDITIONAL RESOURCES

+------------------------+---------------------------------------------+
| Report:                | Author:                                     |
+------------------------+---------------------------------------------+
| 2002 State of the      | ACNielsen, in cooperation with:             |
| Industry               |                                             |
|                        | Canadian Council of Grocery Distributors    |
|                        |                                             |
|                        | Canadian Federation of Independent Grocers  |
|                        |                                             |
|                        | Food and Consumer Products Manufactures of  |
|                        | Canada Association of Sales and Marketing   |
|                        | Companies \[Washington\]                    |
+------------------------+---------------------------------------------+
| 2002 Shopping Basket   | Canadian Council of Grocer Distributors     |
| Report                 |                                             |
|                        | ACNielsen                                   |
+------------------------+---------------------------------------------+
| Canadian Grocer        | Canadian Grocer                             |
| Executive Report       |                                             |
| 2003-2004              |                                             |
+------------------------+---------------------------------------------+
| Who's Who 2003         | Canadian Grocer                             |
+------------------------+---------------------------------------------+

[^1]: Retail Sales Data 2001, Consumer Expenditures, ACNielsen Canada.

[^2]: Retail Sales Data 2001, Consumer Expenditures, ACNielsen Canada.

[^3]: Imports by Major Group, pg. 16, Food Statistics 2001, Statistics
    Canada.

[^4]: Imports by Major Group, pg. 16, Food Statistics 2001, Statistics
    Canada.