Hot House Suspends Grower Distribution

TORONTO - Aug 31/04 - SNS -- The Hot House Growers Income (HHGI) Fund has suspended cash distributions to its greenhouse growers in response to an "unprecedented drop in tomato prices".

In its second quarter report, Hot House Growers said prices for two of its vine tomato crops were lower than expected due to bumper crops throughout North America. Since then, pricing in these two categories has declined much more dramatically, with year-over-year prices for large vine tomatoes down by an average of 54%, and prices for Campari tomatoes down by an average of 39% during the month of July and the first two weeks of August, 2004.

"During the second quarter, we were able to overcome an average 20% drop in prices for these products with higher volumes," said Stephen Fane, President and CEO of HHGI. "We expected to do the same in the third quarter, and we also anticipated a rebound to normal prices. However, recently received sales results are showing just the opposite. As an example, prices for large tomatoes on the vine were off by as much as 57% in late July."

Production volumes remain excellent and costs are on budget, but the overall decline in sales revenues has led to the decision to suspend distributions.

The Fund earns interest income on notes due from HHGI. Distributions to unitholders are paid from this interest income. These notes represent a 75% interest in HHGI. The other 25% interest is subordinated to the Fund in terms of earnings and distributions. This subordinated interest has received no distributions this year, and will not receive distributions until the public unitholders have received all targeted distributions. The Fund's subordination feature will remain in place until public unitholders have received distributions equal to at least five times the targeted annual distribution of $1.275 per unit.