Tough Times at Kraft Heinz
CBJ — Food giant Kraft Heinz is in the midst of undergoing an investigation by U.S. federal regulators and the value of its Oscar Mayer and Kraft brands is being slashed by US$15.4 billion.
The news hit the stock market immediately with Kraft’s shares plunging nearly 30% on Friday morning. The drop comes after the biggest single-day decline, after posting a stunning $12.6 billion loss for the fourth quarter.
Kraft Heinz also confirmed receipt of a subpoena in October from the U.S. Securities and Exchange Commission related to its procurement operations. The company said that it is fully co-operating with the SEC.
The Pittsburgh company is conducting its own internal investigation and is making improvements to its internal controls and taking other actions to prevent similar mistakes going forward.
The nearly $13 billion loss in the most recent quarter is a devastating recognition that efforts to change the trajectory of the company have not been as successful as once thought. The loss follows an $8 billion profit in the same period last year.