Cadbury owner charged with manipulating wheat markets
Published 02/04/2015 | 08:50
The owner of Cadbury has been charged with manipulating wheat markets.
The US Commodity Futures Trading Commission accused Kraft Foods and Mondelez Global of earning more than $5m by making a false attempt to buy $90m-worth of wheat futures.
The CFTC also alleges that US food giant Kraft, which last week announced a $100bn merger with Heinz, violated wheat futures position limits and engaged in noncompetitive trading.
Mondelez recently announced that over 200 jobs are to be cut as part of a major restructuring in Cadbury's Irish operations.
The workforce are to be reduced as part of an overall efficiency programme being implemented by the company.
According to the charges against Kraft and Mondelez, in 2011 the two companies "developed, approved, and executed ... a strategy to buy ... a six-month supply of wheat". The CFTC claims the firms "never intended to take delivery of this wheat", expecting the market to react to their long position on the commodity by lowering prices and "strengthening the spread" between prices at the time and futures.
"Those price shifts did occur and ... Kraft and Mondelez earned over $5.4m in profits," the CFTC claimed.
In a statement, Kraft said that while it is named in the CFTC's complaint, "the transaction at issue occurred before our spin-off from Mondelez in, and it involved the business now owned and operated by Mondelez or its affiliates".
"We do not expect this matter to have a financially material impact on Kraft," it added. "Mondelez will predominantly bear the costs of this matter and any monetary penalties or other payments that the CFTC may impose."
Mondelez declined to comment.