Kraft Purchases Life Savers in Canada

Now, Kraft Foods essentially has its hands on all the holes under the Life Savers brand in North America and rest of the world. The food giant has purchased the rights to the Life Savers confectionary brand for the Canadian marketplace from Beta Brands Limited, a subsidiary of Beta Brands.

Following last year's acquisition of Nabisco, Kraft had assumed ownership of the rights to Life Savers in countries around the world--but not in Canada. Nabisco had previously licensed the rights to Beta, which were restricted to certain hard roll candies for sale in Canada only. The transaction does not have an adverse effect on Beta's sales into the U.S. market. Kraft now owns the rights to Life Savers throughout North America. "Life Savers will complement our existing confections and snacking portfolio and strengthen Kraft's position in this growing segment," said Dan Butler, coo, Kraft Canada, Inc. In Canada, Kraft will add such popular Life Savers products as the five-flavor roll, sweet story books and lollypops.

Beta received $19.5 (Can.) million (US, $12.3 million) for the sale. Under terms of the transaction, Beta will continue to own the rights to the Breath Savers and Beech-Nut brands in Canada. Beta will continue to supply Kraft with Life Savers hard candy under a co-packaging agreement with an initial term of two years, which is expected to partially offset lost sales for Beta during the transition period. Concurrent with the sale, Beta and Kraft entered a broader license agreement, with will allow Beta to pursue extensions to its current product line under the Breath Savers and Beech Nut brands in Canada.

"This is a win-win situation for Beta Brands, Kraft and our customers," said John Lambert, president and ceo of Beta. "We believe Kraft is better suited to realize the full potential of the Life Savers brand in Canada. This transaction will strengthen our capital structure and allow us to concentrate on our core objectives, including growth in the U.s. and increased penetration in the Canadian market through enhanced focus on our Breath Savers, soft candy and baked goods."