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Maple Leaf Reports Third Quarter 2003 Financial Results

Toronto, Ontario
– Maple Leaf Foods Inc. (TSX:MFI) today reported its financial results for the
third quarter ended  September 30, 2003.  

Sales for the third quarter of
$1.3 billion were consistent with the same period last year, while earnings
from operations of $32.8 million before unusual items ($22.5 million after
unusual items) decreased from $49.8 million last year. Earnings for the quarter
were primarily affected by a continuation of low pork prices in the industry
resulting from an oversupply of meat proteins in North America, coupled with a
continued weaker Japanese pork market.

The Company recorded an unusual
charge to earnings of $10.3 million before tax ($6.9 million net of tax) to
account for several business restructuring initiatives, principally
consolidation of the Company’s feed mill operations in the Maritimes and
reorganization of its Atlantic Canada meat processing operations. 

Net earnings for the third quarter before unusual items
were $7.2 million, or $0.05 per share compared to $0.16 per share last
year.  After accounting for unusual items, net earnings of $0.3 million (a
loss of $0.01 per share) decreased from $19.3 million in 2002.  Year to
date earnings before unusual items were $18.5 million or $0.13 per share
compared to $58.8 million or $0.49 per share last year.  

On September 25th the Company announced that it had signed
a definitive agreement to acquire the Schneider Corporation.  With annual
sales of $1.2 billion, Schneiders is a brand leader in the Canadian premium
quality packaged meats and grocery products market.  The acquisition will
balance Maple Leaf’s strength in primary processing and more than double the
size of the Company’s processed meat operations.  The transaction is
expected to close in early 2004, subject to Canadian Competition Bureau

“While we continued to feel the
effects of one of the most difficult protein markets in recent history,
strengthening pork prices and declining cold storage stocks indicate that the
worst may finally be behind us,” said Michael McCain, President and Chief
Executive Officer. “Our focus is on building long term value.  In the
quarter we undertook several key strategic initiatives, including increasing
our ownership in the bakery business, supporting continued market leadership in
our feed operations, and significantly increasing our processed meat business
by arranging to acquire Schneiders. We are very confident about the future and
the opportunities these and other initiatives will provide to increase
shareholder value.”    

Other expenses for the third quarter of $1.1 million
related primarily to incremental transaction and advisory costs related to the
reorganization of the Bakery Group last year.  Interest expense for the
quarter of $17.4 million increased from $13.9 million for the prior year, due
to higher interest rates and debt levels.  Cash flow from operating
activities for the third quarter of $22.2 million compared to $37.9 million
last year, reflecting significantly reduced investments in working capital
offset by lower earnings and related changes to future tax balances.

Capital expenditures of $35.4 million compared to $24.5
million last year, with the increase primarily due to an investment in another
par-baked line at the Company’s bakery in Roanoke, Virginia to meet the
requirements of a new exclusive 10-year contract with a major North American
foodservice chain.

In October the Company renegotiated its primary bank debt
facility, a significant amount of which was due to mature in 2004. 
Principal changes include an increase in the facility from $519 million to $635
million, a revised maturity date of October 2005, and changes in interest

On August 24, 2003, the Company
purchased 903,100 common shares of Canada Bread for $26.50 per share pursuant
to a private agreement, increasing Maple Leaf Foods’ ownership of Canada Bread
from 81.1% to 84.7%.

Meat Products Group (branded
value-added prepared meat products; fresh, frozen and branded
value-added pork products; fresh, frozen and branded
value-added chicken and turkey products; and global food
marketing, distribution and trading)

Product Group sales for the third quarter declined to $701.6 million from
$717.6 million last year, as increases in consumer foods, pork and poultry
sales were offset by a reduction in the number of hogs processed and the
closure last year of the beef kill operations in Atlantic Canada. Year-to-date
sales of $2.1 billion compared to $2.2 billion last year. Losses from
operations of $9.7 million (including a $1.3 million pension plan wind-up gain)
compared to operating earnings of $11.9 million last year.  Losses for the
first nine months were $11.9 million (including a $9.5 million pre-tax pension
gain) compared to operating earnings of $39.0 million last year. 

Most of the
third quarter was characterized by lower hog prices, compressed processing
margins and lower sales to Japan compared to the same period last year. As a
result, reduced margins from the Company’s primary pork processing and
international businesses more than offset strong performance in the consumer
foods and poultry businesses.  Towards the end of the quarter, both hog
prices and pork processing margins showed marked improvement, and volume and
margins from the Japanese business began to improve. Industry forecasts expect
both domestic and Japanese pork markets to continue to improve in 2004.

margins continued to strengthen throughout the quarter, due to stronger selling
prices and Six Sigma cost improvements. The improved pricing reflects a trend
in North American poultry markets that has continued so far into the fourth
quarter. Earnings in the Consumer Foods operations were affected by a
short-term switch to beef products as consumers took advantage of lower beef
prices, however, overall sales and margins in this business continued to
improve due to strong wiener and bacon sales and increased market penetration
in the food service sector. In August Maple Leaf launched a line of five
refrigerated pre-cooked roast products, produced at the Company’s plant in
Laval, Quebec, which provide consumers a high quality, nutritious dinner roast
ready to eat in ten minutes.  The launch has been well supported with full
product listings in all major national and discount banner stores across

from the Company’s meat processing operations in Atlantic Canada continued to
improve, although they declined from the prior year period.  Plans were
recently announced for further downsizing at the Moncton facility, the cost of
which has been included in unusual items.

Agribusiness Group (research,
development and supply of quality livestock nutrition products and services;
pet food; swine production; and animal by-products recycling)

Agribusiness Group sales for
the third quarter were $229.9 million compared to $239.6 million last year,
while year-to-date sales were $684.1 million compared to $701.5 million last
year. Sales declined as a result of lower commodity costs for grain products.
Operating earnings in the third quarter increased by 53% to $25.9 million from
$16.9 million last year.  Earnings for the quarter benefited from 
strong performance from feed sales and profit from the sale of poultry
production quota in Atlantic Canada.  After excluding the impact of the
profit on the sale of poultry production quota, earnings from operations were
up 22% over the same quarter last year.   Year to date earnings from
operations were $57.1 million compared to $51.7 million last year.

The Company recently approved
plans to construct a world-class $15 million feed mill in Moncton, New
Brunswick,  with a capacity to produce 225,000 tonnes of premium quality
feed annually. When the mill is commissioned, expected within 18 months, 
three existing mills in the region will be closed and production consolidated
into the new mill.  The majority of these  closure costs were
recorded as an unusual item in the third quarter. Future decommissioning costs
which will be charged to earnings as incurred.  This investment,
consistent with similar investments in Ontario and Western Canada, is a
continuation of the Company’s strategy to maintain leadership in the Canadian
feed industry by providing high quality feed and service at the lowest cost
possible to Maple Leaf’s producer partners.

Bakery Products Group
(comprised of Maple Leaf’s 84.7% ownership in Canada Bread Company, Ltd., a
leading producer of fresh and frozen par-baked bakery products, and fresh pasta
and sauces)

Bakery Products Group sales for
the third quarter increased to $321.5 million compared to $311.5 million for
the same period last year, while year-to-date sales of $943.1 million compared
to $863.9 million last year. The increased sales were due to volume increases
across the Fresh, Frozen and U.K Bakeries operations.   Operating
earnings of $16.5 million compared to $21.0 million last year, while earnings
for the first nine months were $43.6 million compared to $52.1 million last
year. The decline in earnings was primarily due to costs associated with a
labour dispute at a Fresh Bakery distribution centre in Quebec, which was
settled in September.  Excluding these costs, the Bakery Group would have
recorded a 2% increase in earnings compared to the same quarter last year (a 2%
decrease year to date).  The Fresh Bakery operations had solid performance
in the quarter, driven by increased sales to the U.S and in the Quebec market,
and strong growth in central Canada driven by increased sales of Dempsters
Fresh to the Last Slice.   The Frozen Bakery operations secured new
in-store bakery business during the quarter in the United States and Canada, as
well as several new food service contracts, and extended sales of its partially
baked artisan bread products into Canada and through new US national retail

The Company declared a dividend
of $0.04 per share payable on December 31, 2003 to shareholders of record on
December 12, 2003.

Maple Leaf Foods Inc. is a
leading Canadian food processing company committed to
delivering quality food products to consumers around the
world.  Headquartered in Toronto, Canada, the Company
employs approximately 18,000 people at its operations across
Canada, and in the United States, Europe and Asia.  The
Company reported sales of $5.1 billion in 2002.

A conference call will be held at 2:00 p.m. (Toronto time)
on October 22, 2003 to review Maple Leaf Foods’ financial results for the third
quarter ended September 30, 2003.   To participate in the call,
please dial in to 1-800-387-6216.  For those unable to participate
playback will be made available an hour after the event at 1-800- 408-3053
passcode 1489257#.   An Investor Presentation related to the
Company’s third quarter financial results will be available at (click on Investor Zone and
then Investor Communications) after release of the third quarter financial

This release contains
forward-looking statements and information, which may include statements
concerning the company’s outlook for the future, as well as other statements of
beliefs, future plans and strategies or anticipated events, and similar
expressions concerning matters that are not historical facts. The
forward-looking information and statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in, or implied by, the statements. These risks and uncertainties
include availability and prices of livestock, raw materials and supplies,
livestock costs, product pricing, the competitive environment and related
market conditions, operating efficiencies, access to capital, the cost of
compliance with environmental and health standards, adverse results from
ongoing litigation and actions of domestic and foreign governments. Maple Leaf
assumes no obligation to publicly update or revise these forward-looking
statements even if experience or future changes make it clear that any
projected results expressed or implied therein do not materialize. Refer to the
Company’s annual report, management information circular, annual information
form and other filings with the Ontario Securities Commission and Toronto Stock
Exchange for further information on risks and uncertainties that could cause
actual results to differ materially from forward-looking statements.