Scotia sells `wonderfood' to US
Tuesday 09 February 1999
The American company bought the worldwide rights to use Olibra - a substance that makes people feel full after a few spoonfuls - in its breakfast cereals, which include the best-selling Cheerios and Kix. General Mills will also be allowed to sell Olibra-enhanced yoghurt, soups and salad dressings in North and South America.
News of the deal with the US company, the world's largest producer of cereals, sent shares in Scotia soaring.
The stock - which has slumped in recent times as Scotia was hit by drugs setbacks and boardroom rows - closed 42 per cent higher at 98.5p. Analysts said the tie-up with General Mills, which has yearly sales of $7bn and a market value of $13bn, was a vote of confidence in the product.
"It's a good deal, the choice of General Mills is a good endorsement of Olibra and it is in the American market, which is by far the largest in the world," said Nick Woolf, the vice-president of BancBoston Robertson Stephens, the US financial house.
Olibra is a fat-based ingredient derived from palm and oat oil which appears to reduce appetite, helping people to lose weight. It is already used in the Swedish yoghurt Maval, sold in some UK supermarkets, and in some St Ivel desserts produced by the dairy group Unigate.
Scotia declined to spell out the financial terms of the deal, but it is understood that General Mills will pay the Stirling-based group a number of milestone payments during further product developments and a royalty of around 3 per cent on sales of Olibra products. The US group will also pay for the development and marketing of Olibra food. The first products are not expected to hit the market before 2001, as Olibra will have to be approved by the US regulatory authorities.
Dr Robert Dow, the chief executive of Scotia, said that the potential market for appetite suppressants was immense. He added that Olibra could be used in virtually every solid food, soup and milk-based drink. The worldwide market for cereals, soups and salad dressings was over $74bn last year, with almost $20bn spent in the US alone.
Dr Dow said the General Mills deal would help Scotia to move into profit over the next five years. He added that the deal should help the group to speed up manufacturing agreements with Asian and European partners.
- 1 Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
- 2 James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
- 3 Reading Festival 2014: Tesco branch replaces salad and potatoes for Jagermesiter and vodka
- 4 Here’s the damning letter Robin Williams wrote to his Mrs Doubtfire co-star's principal after they expelled her
- 5 Ferguson protests: 90-year-old Holocaust survivor Hedy Epstein ‘arrested’ by police during St Louis demonstrations
Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
Michael Brown shooting: Ferguson police shoot and kill second young black man
James Foley 'beheaded': Isis video shows militant with British accent 'execute US journalist' – and warns Obama of more to come
Iraq crisis: Islamic State's message to America - 'We will drown you all in blood'
Ferguson: In the heartlands of America, a descent into madness
Isis threat: Cameron wants an alliance with Iran
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
iJobs Money & Business
£350 - £400 per day: Orgtel: HR Analyst - Banking - Bristol - £350 - £400 per ...
£475 - £550 per day + competitive: Orgtel: Senior Technical Accountant-Insuran...
£200 - £290 per annum + competitive: Orgtel: Sales Performance Manager, Key Ba...
£25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...