Specialty Foods Group Income Fund Announces Receipt of Notice of Default Under License Agreement



    /NOT FOR RELEASE OVER U.S. NEWSWIRE SERVICES/

    TORONTO, Aug. 1 /CNW/ - Specialty Foods Group Income Fund (the "Fund")
(NEX: HAM.UN.H) announced today that a letter dated July 31, 2007 was received
from attorneys representing Nathan's Famous Systems, Inc. ("NFSI"). The letter
(i) alleges that SMG Inc., a wholly owned subsidiary of Specialty Foods Group,
Inc. ("SFG") has breached the terms of its license agreement (the "License
Agreement") with NFSI and (ii) states that NFSI invokes its rights to
terminate the License Agreement one year from notice or July 31, 2008.
    As previously announced by the Fund, SMG believes no breach has occurred
and filed on July 30, 2007 for declaratory judgment to confirm their position.
SMG, Inc. remains committed to fulfilling all terms of the License Agreement.
    Specialty Foods Group Income Fund is an open-ended, limited purpose trust
established under the laws of the Province of Ontario, which indirectly holds
an interest in Specialty Foods Group, Inc. ("SFG"). SFG is a leading
independent U.S. producer and marketer of premium branded and private-label
processed meat products. SFG produces a wide variety of products such as
franks, hams, bacon, luncheon meats, dry sausage and delicatessen meats. These
products are sold to a diverse customer base in the retail (e.g. supermarkets)
and foodservice (e.g., restaurants) sectors. SFG sells products under a number
of leading national and regional brands, such as Nathan's, Swift Premium,
Field, Fischer's, Liguria, and Scott Petersen as well as on a private-label
basis.
    This news release contains forward-looking statements. Such statements
involve known and unknown risks, uncertainties and other factors outside of
management's control that could cause actual results to differ materially from
those described in the forward-looking statements. The Fund does not assume
responsibility for the accuracy and completeness of those forward-looking
statements and does not undertake the obligation to publicly revise these
forward-looking statements to reflect subsequent events or circumstances.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.





For further information:

For further information: David Shapland, Executive Vice President and
CFO, Tel: (757) 952-1210, Email: investorrelations@sfgtrust.com, Website:
www.sfgtrust.com

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SPECIALTY FOODS GROUP INCOME FUND

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