Prince Edward Island’s long-beleaguered packing plant, Atlantic Beef Products, has now ramped up its slaughter and processing capacity to meet a new commitment from grocery chain Sobeys.

The Nova Scotia-based grocery chain on Tuesday announced ABP’s Island View Farms is now the “primary” brand for beef sold at the five Sobeys, five Co-op and three Foodland stores the grocery company supplies on Prince Edward Island.

The agreement, phased in over the past few weeks, “means P.E.I. customers can choose local first, it means larger herd sizes for P.E.I. and Maritime beef cattle producers, and it means ABP has a committed local partner as it increases plant capacity and grows its business,” Peter Doucette, general manager for Sobeys Atlantic, said in a release.

Sobeys said the agreement means about 80 per cent of the selection at the 13 stores stores is now supplied by ABP, under the packer’s Island View and Certified Island Beef brands.

Sobeys said Tuesday it entered talks 18 months ago with ABP and Atlantic Canada’s cattle producer groups, to make sure ABP’s plant capacity and cattle herds in the region could be expanded to meet the added demand.

The federally-inspected ABP plant at Albany, northeast of Borden, now has the capacity to supply the P.E.I. stores on top of its other existing business, the packer said.

ABP said it’s also looking for more supply from beef producers, to further expand its space in both domestic and export markets. “We hope local producers can ramp up production of beef cattle by at least 10,000 head per year in total,” the company said via email.

Brian Morrison, chair of P.E.I. Cattle Producers, said in Tuesday’s release the grocery chain “has really stepped up in terms of their commitment to local cattle producers. They have sat at the table with us and helped us plan our herd growth to ensure we have the capacity to meet their needs.”

The ABP plant, which was built in partnership with local producers, sources beef from producers in P.E.I. as well as New Brunswick and Nova Scotia and is the only federally inspected cattle slaughter plant in Atlantic Canada.

The plant, however, booked annual losses for years after its opening in late 2004. The P.E.I. government has committed regular funding to ABP since 2009, following a 2007 cash infusion from the federal, Nova Scotia, New Brunswick and P.E.I. governments.

Since then, the plant has set up a ground beef production line and rolled out its branded beef lines such as Island View, Certified Island Beef and Blue Dot Reserve.

The new deal with Sobeys “means additional volume through our plant in a business where volume is a key ingredient to operate efficiently and cost-effectively,” ABP president Russ Mallard said in Tuesday’s release.

“We appreciate the commitment Sobeys is making to assist us in our goal to ensure ABP is here for the producers in our region for the long term.”

The specifics of ABP’s agreement with Sobeys weren’t made public, but the two companies said via email they want to see it continue over the long term.

“We are confident (customers) will be very happy with Island View Farms beef, so we cannot see any reason at this point to be anything but optimistic for a long-term supply arrangement.”

Asked whether the arrangement could eventually expand elsewhere in Atlantic Canada, the two companies said they “want to make sure we get it right on the Island first and then will look to future plans for expansion to other provinces.”

Sobeys, whose roots in Atlantic Canada’s grocery business date back to 1924, has been on an aggressive expansion track coast to coast since 1987, taking over the Thrifty Foods chain in British Columbia in 2007, the Safeway chain in Western Canada in 2013, and several Co-op Atlantic grocery stores last year.

The company also operates the IGA, Foodland, FreshCo, Price Chopper and Lawtons Drugs chains, for a total of over 1,500 stores across all 10 provinces. — AGCanada.com Network