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Maple Leaf Foods Reports Third Quarter Results

Toronto, Ontario
— Maple Leaf Foods Inc. (TSE:MFI) today
announced its results for the third quarter
ended September 30, 2001.

Financial Results

Sales for the third quarter increased 13% to $1.20
billion from $1.06 billion last year reflecting top-line growth in all
operating groups. Earnings from operations for the third quarter of $30.2
million were up 28% from $23.7 million last year. The Bakery Products
Group and the Agribusiness Group both reported increased earnings while the
Meat Products Group reported a loss from operations. Net
earnings for the quarter were $10.2 million ($0.10 per share) compared to
$15.7 million ($0.15 per share) last year; however, in the third quarter
of 2000, net earnings included a $12.9 million ($0.13 per share) after tax gain
on the sale of short-term investments. On a comparable basis, earnings
per share in the third quarter of 2001 of $0.10 compares to $0.02 last

Year-to-date earnings from operations of $99.9 million
are up 56% from last year. Year-to-date net earnings were $32.7 million
($0.31 per share) compared to $24.2 million last year ($0.22 cents per share),
or $11.3 million ($0.09 per share) excluding the gain on the sale of short-term

“Our performance for the quarter was
substantially greater than a year ago ,
reflecting the progress we are making
operationally in all aspects of the business”,
said Mr. Michael H. McCain, President & Chief
Executive Officer of Maple Leaf Foods. “However,
the underlying improvements were tempered this
period due to an unexpected short-term market
condition relating to Japanese pork tariffs. We
are, nevertheless, highly satisfied with the
continued improvement which is being made toward
achieving the appropriate returns from the major
investments made over the past several years.”

Meat Products Group

Meat Products Group sales increased 18% to $792.3
million primarily as a result of the inclusion of the results for the Winnipeg
fresh pork facility, which was acquired in the first quarter of this year.
Year-to-date sales of over $2.3 billion compared to $1.8 billion last
year. Operating losses for the quarter were $4.5 million compared to a
loss of $4.0 million last year. Year-to-date operating earnings of $15.0
million compared to a loss of $12.8 million the year before.

Maple Leaf Pork continues to achieve operational
improvements across all of its facilities, and has substantially increased its
spending on new product development activity. Operating earnings for the
third quarter, along with those of Maple Leaf Foods International, were
negatively impacted by a significant short-term disruption to the
Japanese pork market. Unexpectedly high Japanese pork imports in
the first and second quarter, stimulated largely in response to the foot and
mouth outbreak in Europe, triggered Japanese “safeguard duties” on a
range of pork products. As a result, Japanese imports were reduced
acutely in the third quarter, and margins in other markets were pressured as
product intended for that market was sold elsewhere. Management believes
that this market disruption adversely impacted the Meat Product Group’s
earnings by over $10 million in the third quarter. While the
safeguard duties will remain in place until the end of March 2002, the outlook
for the remainder of the year is for steadily improving sales to Japan.
Additionally, we have been actively working to diversify our customer base long
term, predominantly into U.S. markets.

In July, Maple Leaf Poultry launched Maple Leaf Prime Naturally, Canada’s first 100%
vegetable grain fed chicken, produced from
chickens fed exclusively the Company’s
proprietary Nutri-Prime feed and
processed using Maple Leaf Poultry’s Flav-R-Loc
production process. Initial consumer response
has been very positive, although financial
results for the quarter were negatively affected
by start-up manufacturing and procurement costs
associated with the product launch. Maple Leaf
Consumer Foods posted strong results in the

Bakery Products Group

Bakery Products Group sales increased 5% to $178.3
million from $169.1 million last year. Year-to-date sales increased 6% to
$515.8 million from $485.6 million last year. Operating earnings for the
quarter rose 77% to $10.6 million from $6.0 million, bringing year-to-date
operating earnings to $24.1 million, an increase of 64% over last year. The
substantial increase in operating earnings for the quarter was driven by strong
growth in par-baked bread sales and profitability of Maple Leaf Bakeries (USA)
and continued performance improvements at Canada Bread.

Progress was made during the quarter on several
expansion projects in the Bakery Products Group. The US$11 million
expansion to the Roanoke, Virginia bakery is proceeding on plan, with
completion scheduled for December. Canada Bread’s acquisition of the
remaining 75% of the outstanding shares of Multi-Marques closed on October 12,
2001. This acquisition strengthens Canada Bread’s position as the leading
commercial bakery in Canada. In September, Maple Leaf Foods acquired its
second bakery facility in the United Kingdom with the purchase of the leading
branded bagel producer in the U.K., New York Bagel Company. Maple Leaf
Foods International opened the Company’s first U.K. bakery facility in

The Bakery Products Group now has annualized sales of
over $1.0 billion and manufacturing facilities in Canada, the United States and
the United Kingdom.

Agribusiness Group

Agribusiness Group sales of $227.3 million increased 3%
from $220.2 million last year. Year-to-date sales increased to $652.8
million from $627.7 million last year. Operating earnings for the quarter
of $24.1 million were up 11% from $21.7 million last year, while year-to-date
operating earnings of $60.9 million were down from $62.1 million last year.

The Company’s Vertical Coordination pork and poultry
value chain strategy contributed to Agribusiness Group posting
quarter-over-quarter gains in sales and operating earnings. Both Landmark
Feeds and Shur-Gain reported continued strong earnings from their animal
nutrition operations. The Elite Swine hog production operation had solid
results driven in part by high hog prices. Rothsay Rendering reported improved
earnings in the quarter due to declining natural gas prices and stronger
commodity markets, although both of these factors have negatively impacted
year-to-date performance.

Other Information

Other income for the quarter was $4.0 million compared
to $18.0 million last year. The primary component of other income
in the quarter was a $3.5 million dividend received from a passive investment
in a flour mill located in the United States. In the third quarter 2000,
a sale of short-term investments resulted in a net gain before taxes of $17.2
million. Interest expense for the quarter of $16.0 million decreased from
$17.7 million last year due to decreasing interest rates. Year-to-date interest
expense of $49.5 million was up from $47.3 million last year due to higher
average borrowing levels, offset partly by declining interest rates.

Cash Flow

The Company’s cash flow from operations for the quarter
of $6.1 million is higher than last year due principally to higher cash
earnings. Capital investment for the year-to-date of $52.2 million was
lower than last year’s level of $86.7 million. The company has a
significant number of capital projects in progress, the largest one being Maple
Leaf Bakery’s US$11 million expansion to its Roanoke, Virginia frozen par-baked
facility, which will result in an increase in capital investment in the fourth

The Company declared a dividend of $0.04 per share
payable on December 31, 2001 to shareholders of record on December 14, 2001.

Maple Leaf Foods Inc. is a leading
Canadian-based food processing company.
Headquartered in Toronto, Canada, the Company
employs more than 13,000 people at its
operations across Canada and in the United
States, Europe and Asia.

A conference call will be held at 2:30 p.m. (Toronto
time) on October 26, 2001 to review Maple Leaf Foods’ financial results for the
third quarter ended September 30, 2001. The call will be hosted by
Michael H. McCain, President & Chief Executive Officer; Tom P. Muir, Chief
Financial Officer and Michael H. Vels, Executive Vice-President, Finance.

To participate in the call, please dial in to
1-800-633-8493. For those unable to attend, the call will be taped and
posted for one month. You may access the tape by dialing 1-800-558-5253,
passcode 19889653 or review the transcript on our website.