SHURFINE-TOPCO MERGER WOULD CREATE $3.45B COMPANY

MARTIN SCHNEIDER

NORTHLAKE, Ill. -- Shurfine International, a private-label manufacturer and distributor here, said last week it has signed a letter of intent to merge with Topco Associates, a private-label sales and marketing cooperative based in Skokie, Ill.

The combined company would have estimated annual sales of $3.45 billion, according to Karen Vorwald, Topco director of member development.

Shurfine could not be reached for comment.

Vorwald said the merger plans call for Shurfine's business to be folded into Topco's operations, creating a new company, Topco Associates. Plans also call for the Shurfine offices to be integrated into the Topco offices in Skokie, she added.

"There were several motivators behind the decision," Vorwald told SN. "Using the large volume and expertise of both companies, we can provide continued value to our customers.

"Also, the addition of the Shurfine business gives another dimension to the business, with Shurfine's extensive experience with wholesale grocery. This factor will allow us to expand beyond our traditional business of dealing with retail customers, and provide opportunities for cross-channel growth in the future."

Ken Guy, Topco senior vice president, told SN, "We have been in discussion with Shurfine for some time. It makes sense for us to merge on a lot of labels. Ultimately, we are hoping to combine our strengths and simply provide some great private-label programs."

The merger is subject to approval by all the cooperative members of Shurfine and Topco, with a vote on the merger scheduled for October, Vorwald said.

Brian Sharoff, president of the Private Label Manufacturers Association, New York, told SN, "This merger is not a reflection of the private-label industry, but of the retail and wholesale industry."

Sharoff said companies offering private-label goods to independent retailers have been suffering as independents have been bought by larger retailers and the pool of retail customers shrinks rapidly.