EXCLUSIVE TO ITCHMO: We dug up some buried documents on the Menu Foods Web site, particularly financial reports that outline an exclusive 10-year contract to supply Iams’ with their wet pet food started in 2003. In plain English, Iams’ will only sell Menu Foods’ wet pet foods as its own until 2013.
On October 31, 2003, Menu completed its acquisition of P&G/Iams’ production facility in North Sioux City, South Dakota. The Fund acquired inventory and property, plant and equipment and assumed all the employees of that facility. Concurrent with the acquisition, the Fund entered into an agreement to supply, on an exclusive basis, all of P&G/Iams’ canned wet pet food requirements in the United States and Canada.
The supply contract (the “Contract”) consists of an exclusive agreement to supply all the canned wet pet food requirements for Proctor & Gamble/Iams (”P&G/Iams”) in the United States and Canada. The Contract is carried at cost less accumulated amortization. Amortization, which is charged to cost of sales, is computed over the estimated term of the Contract, which is ten years.
When this recall escapes the collective minds of the public, Menu Foods will continue to make and sell its wet pet foods under the Iams’ brand.
On another note, we were surprised to find a Menu Foods code of ethics document that states:
We are committed to full and honest communications with our customers about Menuâ€™s products and services
Customers are an essential element of our success. Their trust in us must be justified. Care should be taken not to make promises that Menu cannot keep.
No employee shall make false or misleading statements about Menu Foodsâ€™ products and services â€“ not in promotional material, personal sales calls with customers or in any of our communications with customers.
Customers are entitled to candid and thorough explanations of the terms and conditions of sale and any guarantees or warranties.
So far, we have not been impressed with their “candid and thorough explanations”.