Premium Brands Inc. (Toronto: FFF) announced today the sale of its Fresh Pork Division to Olymel, S.E.C., a limited partnership. Olymel is the largest fresh pork exporter and poultry processor as well as the second largest hog processor in Canada. Olymel is based in St-Hyacinthe, Quebec.

The Fresh Pork Division is based in Red Deer, Alberta and includes a state-of-the-art hog processing facility that can process up to 16,000 hogs per day. Currently, the plant is running at 6,000 hogs per day and generates approximately $240 million in sales annually.

As part of the transaction, Premium Brands and Olymel will enter into a seven-year agreement for the supply of raw materials to Premium Brands’ processing operations. Furthermore, Olymel and Premium Brands have initiated discussions to work together on several other value-added initiatives.

The sale is expected to generate total proceeds of about $90 million, which Premium Brands will use to reduce debt and strengthen its remaining processing and distribution businesses. The transaction, which is subject to regulatory approval, is expected to close in March 2001 and meets the current mandate of the Special Committee that was set up last year.

“This is a significant step in the Corporation’s continuing process of reviewing strategic alternatives to create and maximize shareholder value,” said Richard Klassen, Chairman of Premium Brands.

“We believe that this transaction is a win, win for both parties as it enables Premium Brands to focus on its core branded meat processing and distribution businesses while it strengthens Olymel’s position as a national supplier and premier exporter of fresh pork,” said Fred Knoedler, President and CEO of Premium Brands.

“This strategic investment positions Olymel well in becoming one of the largest processors of hogs in North America and is part of an overall plan to expand our activities in Western Canada and to strengthen our position throughout the Pacific Rim,” said Rejean Nadeau, CEO of Olymel.

“The Red Deer facility’s ideal location will enable us to continue expanding our exports of value added fresh pork to Japan and other Asian markets as well as provide large retailers with a national supply solution,” said Paul Massicotte, Chairman of Olymel.

Premium Brands has been engaged in the food processing business since 1917 and has manufacturing facilities in Alberta, British Columbia, Manitoba, Oregon, Saskatchewan and Washington.

Before this acquisition, Olymel processed daily 16,000 hogs, 16,000 turkeys, and 300,000 chickens in its 16 facilities located throughout Quebec and Ontario and employed over 7,000 skilled people. Olymel’s revenue for fiscal year 2000 was in excess of $1.3 billion. The majority shareholder of Olymel is Cooperative federee de Quebec, a federation of Quebec agricultural cooperatives with more than 33,000 members, which has been active in the agri- food industry since 1922.

CONTACT: Will Kalutycz, Chief Financial Officer of Premium Brands Inc., 604-656-3100; or Paul Beauchamp, Vice-president, Corporate Affairs of Olymel S.E.C./L.P., 450-771-0400.