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Jay Telles dies at 61

Jesse Port (Jay) Telles III, who once headed one of the larger cantaloupe growing, packing and shipping operations in the United States and later owned and operated a large citrus packing company with his wife, Leslie, died Feb. 11 at his home in Fresno, CA. He was 61.

A third-generation San Joaquin Valley farmer, Mr. Telles was born March 10, 1945, in Santa Clara, CA. His father, Jess Port Telles Jr., and his uncle, Frank Telles, began farming in the central San Joaquin Valley in the early 1950s, a partnership that eventually grew to comprise more than 40,000 acres of cotton, melons, tomatoes, lettuce, barley and wheat in California and Arizona.

Mr. Telles moved at a young age with his family to Los Banos, CA, where he grew up working on the family farms and in the packinghouses. By the time he was a teenager, he was driving a tractor, tilling cantaloupe and loading crates of cantaloupes onto railcars.

After finishing college, Mr. Telles moved to Eloy, AZ, to supervise the family lettuce operation. He later returned to California, where in the early 1970s he became a partner in the business with his father and brothers. Over the next several years, the Telles family diversified its business interests, incorporating Telles Ranches, Tri Produce, Tri Citrus, Tri Transport, Tri Dairy and the Tri Cotton Gin, and employing thousands of people.

Mr. Telles eventually became president and chief operating officer of Tri Produce, which at one time was the largest cantaloupe growing, packing and shipping operation in the country and the first to pack over 100,000 boxes in one day. Later, he and his wife became owners of Tri Citrus in Porterville, CA, which they operated until about a two years ago.

Atomic Torosian, managing partner of Crown Jewels Marketing & Distribution in Fresno, who was sales manager for Tri Produce from about 1980 to 1986, said, "Jay was quite a pioneer in the industry." There were "a lot of things" that he and his father "brought to the industry," Mr. Torosian said. Among other things, "they were the first people to pack [cantaloupes] into a carton."

Mr. Telles is survived by his wife, three sons and two grandchildren.

California admits error in rejecting 10 Mexican avocado loads

California Department of Food & Agriculture inspectors were right on one count and wrong on 10 counts when they rejected 11 loads of Mexican Hass avocados crossing into the state on Friday, Feb. 16.

Effective Feb. 1, the U.S. Department of Agriculture allows Mexican-grown Hass avocados to enter California under a strict protocol designed to assure that no exotic pests potentially harmful to California's avocado industry would be imported with the fruit.

"Through Friday, we had rejected 11 out of 44 loads" of Mexican avocados coming into the state, Steve Lyle, CDFA's director of public affairs, told The Produce News on Wednesday, Feb. 21. The department released that information Feb. 16, stating that the reason for the rejection was the detection of an invasive pest -- the armored scale insect -- in the loads. Several Internet news sources quickly picked up the story.

However, the department now acknowledges that there was only one finding of an invasive pest in one load. The scales found in the other 10 loads were not invasive, but rather were native to California.

"The entomologist who identified those scales went back and checked the work" after the weekend and found that in every case but one "the pests were, in fact native to California. Therefore, [10 of] the loads which were rejected should not have been rejected," he said. "So the story isn't what it seemed last Friday."

Unfortunately, the loads were "rejected and diverted before we detected the error," Mr. Lyle said. "It is unfortunate, and we regret the error, but one point that we want to make is that we erred on the side of caution here. If you want to make an error, erring on the side of caution is preferable to the opposite."

The department continues to inspect "every commercial shipment of Hass avocados" that comes into the state through CDFA checkpoints, he said. "If we find invasives, we will reject the load, and if we don't find invasives, we will allow it in."

Whole Foods Market and Wild Oats Markets announce merger

AUSTIN, TX -- Whole Foods Market Inc. and Wild Oats Markets have announced that they have signed a definitive merger agreement under which Whole Foods Market will acquire Wild Oats Markets' outstanding common stock in a cash tender offer of $18.50 per share, or approximately $565 million based on fully diluted shares.

Whole Foods Market will also assume Wild Oats Markets' existing net debt totaling approximately $106 million as reported Sept. 30, 2006.

With annual sales of approximately $1.2 billion, Wild Oats Markets is one of the leading natural and organic foods retailers in North America. Wild Oats was founded in Boulder, CO, in 1987 and listed on the NASDAQ National Market in 1996. The company currently operates 110 stores in 24 states and British Columbia, Canada, under four banners: Wild Oats Marketplace (nationwide), Henry's Farmers Market (Southern California), Sun Harvest (Texas) and Capers Community Market (British Columbia).

"Wild Oats Markets and Whole Foods Market have both had a large and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance and to becoming one of the fastest growing segments in food retailing today," John Mackey, chairman, chief executive officer and co-founder of Whole Foods Market, said in a Feb. 21 statement. "Our companies have similar missions and core values, and we believe the synergies gained from this combination will create long-term value for our customers, vendors and shareholders as well as exciting opportunities for our new and existing team members."

He added, "The growth opportunity in this category has led to increased competition from many players, most of whom are not dedicated natural and organic foods supermarkets, but are considerably larger than we are. We have made 18 retail acquisitions in our history, many of which were platform acquisitions from which we have been able to accelerate our growth geographically. Wild Oats Markets will be our largest acquisition and is a great geographical fit as all of our 11 operating regions will gain stores and three of our smallest regions -- our Pacific Northwest, Rocky Mountain and Florida regions -- will gain critical mass. We will also gain immediate access into a significant number of new markets."

"As the natural and organic foods industry continues to receive attention from larger conventional players, the timing for our two companies to join forces could not be better," Gregory Mays, chairman and CEO of Wild Oats Markets, said in the statement. "We believe this strategy is in the best interest of our stakeholders, and our board of directors has unanimously recommended that Wild Oats Markets' stockholders tender their shares in this offer."

Whole Foods Market will be evaluating each banner as well as each store to see how it fits into its overall brand and real estate strategy. Wild Oats Markets has been rationalizing its store base over the last several years to shed underperforming stores, but some additional store closures are expected as well as the relocation of some stores that overlap with stores Whole Foods Market currently has in development.

Whole Foods Market expects to make significant investments in remodeling stores before eventually re-branding them as Whole Foods Market stores. Whole Foods Market agreed in the merger agreement to commence a tender offer on Feb. 27 for all of Wild Oats Markets' outstanding common stock. The tender offer is conditioned upon at least a majority of the outstanding Wild Oats Markets' shares being tendered, as well as customary regulatory and other closing conditions.

Wild Oats Markets' board of directors has unanimously recommended that Wild Oats Markets' stockholders tender their shares in the offer. The Yucaipa Cos., Wild Oats Markets' largest shareholder with approximately 18 percent ownership, has committed to tendering its shares.

Approval of the transaction by Whole Foods Market shareholders is not required. The tender offer will expire within 30 days, subject to extension and to the receipt of customary regulatory approvals. Whole Foods Market currently expects to close the transaction in April.

Southern California retail labor contract nears expiration date

On March 5, the contentious retail clerks contract signed three years ago between the United Food & Commercial Workers union and the three major Southern California grocery chains expires. As of Feb. 21, there was no word on the status of the current negotiations.

In 2004, the three major chains -- Vons, Ralphs and Albertsons -- took a hard negotiating line, which resulted in a 21-week strike and a labor contract very much weighted toward management. The retailers were able to forge an agreement that created a two-tier pay and benefit system greatly reducing benefits and wages for new hires.

Retail consultant Dick Spezzano said that the retailers were looking to cut their overall labor costs as they tried to compete with non-union food outlets such as Wal-Mart, Costco, Trader Joe's, Whole Foods, Wild Oats and a host of independents. On the surface, it appears as if the retailers were successful, as their respective labor forces have turned over as much as 50 percent during the life of the contract. That means nearly 50 percent of their employees are being paid less wages and less benefits than before the strike.

Mr. Spezzano said that each retailer would have to do its own cost analysis to determine if it has truly cut its labor costs as a result of the new contract and to what extent. While those retailers are paying less collectively per hour for their workers, there would typically be lost productivity with a workforce that has much less experience.

In any event, that contract will soon expire, and the union is trying to win back some ground lost in 2004. The UFCW has already come to terms with two Southern California-based retailers -- Stater Bros. and Gelsons -- signing contracts in the last month that are said to eliminate the two-tier approach. Mr. Spezzano said that terms of those separately negotiated contracts have not been released, but on the surface that would appear to be a union win.

This time around, UFCW is negotiating separately with each of the three major retailers. Mr. Spezzano said that there has been no news about the progress, but he believes it would appear to be in the best interests of both sides to reach an agreement without a strike.

The five-month strike was devastating to the workforce and also cost the retailers tens of millions of dollars in lost business. Some have opined that many of the individual stores have still not fully rebounded from the effects of that strike. Today, the Southern California retail scene is even more crowded than it was three years ago due to Wal-Mart opening additional stores and a number of ethnically oriented independents that have added stores.

Union leaders and retailers throughout the nation are closely watching these negotiations because the 2004 contract served as a template for the rest of the United States. Since then, retailers have routinely asked for two-tier contracts, though they have rarely, if ever, signed a contract as heavily weighted toward management as was the Southern California deal.

CTFA names VP of marketing

The California Tree Fruit Agreement, based in Reedley, CA, announced that Colleen Duhart has been named vice president of marketing, effective Feb. 12.

"Colleen has a diverse background in integrated marketing and brings new experience to the CTFA team," CTFA President Sheri Mierau said in a statement. "We look forward to the continued success of current CTFA marketing programs as well as additional insights and innovations under Colleen's leadership."

As vice president of marketing, Ms. DuHart will work in close partnership with Ms. Mierau and will lead the marketing team in the development and execution of innovative marketing programs for CTFA.