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Amazon expands Whole Foods perks for Prime; Starbucks to double China presence

TOP NEWS

* Amazon.com Inc. is offering Prime members additional discounts on groceries already on sale at Whole Foods Market Inc. confirming reports that it will expand perks, which will include free two-hour delivery service in select cities, for its Prime subscribers. Members will be eligible for an extra 10% off sale items, typically hundreds of products throughout the store, plus weekly deep discounts on select best-selling items. The new benefit will be available at all Whole Foods stores in Florida and will expand across all Whole Foods and Whole Foods Market 365 stores in the U.S. this summer.

* U.S. coffee giant Starbucks Corp. is aiming to more than triple its revenue and nearly double its store count in China by the end of fiscal 2022. The company made the announcement during its first China investor conference, adding that it was also looking to more than double its operating income in the country during that period. Starbucks revealed plans to increase its Chinese store count to 6,000 locations in 230 cities from the current 3,300 stores in 141 cities, which calls for adding 600 net stores annually over the next five years across mainland China.

PACKAGED FOODS

* Cereal maker Kellogg Co. said it is discontinuing operations in Venezuela and that the country's government has seized control of the company's manufacturing facility in Maracay. Kellogg said May 15 in an emailed statement that the "current economic and social deterioration in the country" prompted the move. The company settled all its contractual obligations with employees, suppliers and customers in the country.

* Tyson Foods Inc. subsidiaries will acquire poultry rendering and blending assets of American Proteins Inc. and AMPRO Products Inc. for about $850 million. The acquisition will help Tyson Foods to recycle more animal products for livestock feed and pet food as well as expand its presence in the growing animal feed ingredient business.

* Pioneer Foods' acquisition of Heinz Foods South Africa, a unit of Kraft Heinz Co., was cleared by South Africa's Competition Tribunal with conditions. The competition regulator said the South African packaged foods company cannot retrench more than 27 skilled or semiskilled workers for a period of two years.

* New Zealand-based a2 Milk Co. Ltd. reported the revenue for the 9 months ended March 31, at NZ$660 million, marking a 70% increase from the prior year. The growth, which was driven by strong sales in both nutritional products and liquid milk, also includes the impact of seasonal sales from key China selling events weighted toward 1H18, the company said. The company projected the group revenue in the range of NZ$82 million to NZ$87 million for 2018.

* Kraft Heinz is pulling out of the cheese market in India as its cheese products are no longer in stores and have not been restocked for months, The Times of India reported, citing multiple industry and trade sources. Kraft Heinz has reportedly not laid out its plans to its distributors but has paused cheese production in the country. A company spokesperson said it has no comments regarding the cheese withdrawal, the report said.

* The events unit of the Global Dairy Trade, owned by Fonterra Co-op Group Ltd., held a fortnightly auction of dairy products where the GDT price index increased 1.9% to $3,637 per ton, with anhydrous milk fat leading the climb with a 5.8% rise in price, Reuters reported. Skim milk powder prices reportedly went up 3%, while the price of the most traded item, whole milk powder, only picked up by 0.2%.

RESTAURANTS

* Yum! Brands Inc.-owned Pizza Hut joined forces with Telepizza Group SAU to form an international growth alliance. This collaboration will accelerate growth across Latin America, excluding Brazil, the Caribbean, Spain, Portugal and Switzerland. Telepizza Group will open 1,300 new stores over the next decade across the covered countries as a result of the long-term alliance. The deal will double Pizza Hut's footprint across the covered regions as well.

* U.K. restaurant operator Mitchells & Butlers PLC reported a decline in adjusted earnings per share in the first half of fiscal 2018 to 13.9 pence from 15.2 pence per share in the year-ago period. CEO Phil Urban said that increased costs from wage inflation, property and food negatively impacted the company's margins in the 28-week period ended April 14. The company said it made progress on its three priorities of building a more balanced business, instilling a more commercial culture and driving an innovation agenda.

* SSP Group PLC, the U.K. operator of food and beverages outlets at travel locations, reported that first-half earnings jumped as sales were boosted by new contract openings and operational improvements. The company said underlying diluted EPS in the six months to March 31 rose to 5.5 pence from 4.1 pence as sales climbed to £1.18 billion from £1.07 billion. The acquisitions of TFS in India and Stockheim in Germany contributed 2% to revenue, said the company, adding that its performance was aided by good progress in North America and the Asia-Pacific.

INDUSTRY NEWS

* China will send teams to Brazil by the end of May to inspect 84 meatpacking plants to evaluate them for exports to China, Reuters reported, citing a statement from Brazil's Ministry of Agriculture. A ministry spokeswoman reportedly declined to identify the plants and companies involved in the evaluation.

The day ahead

Early morning futures indicators pointed to a mixed opening for the U.S. market.

In Asia, the Hang Seng fell 0.13% to 31,110.20, and the Nikkei 225 was down 0.44% to 22,717.23.

In Europe, as of midday, the FTSE 100 was up 0.13% to 7,732.64, and the Euronext 100 had fallen 0.09% to 1,070.51.

On the macro front

The MBA mortgage applications report, the Housing Starts report, the Industrial Production report, the Atlanta Fed's business inflation expectations survey and the EIA petroleum status report are due out today.

The Daily Dose is updated as of 8 a.m. ET. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.