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Mondelez, Kraft Must Face Wheat Price Fixing Lawsuit
USAgNet - 06/28/2016

A federal judge in Chicago on Monday refused to dismiss a lawsuit in which wheat futures and options traders accused Kraft Heinz Co and Mondelez International Inc of illegally manipulating the grain's price at their expense. Reuters reports that U.S. District Judge Edmond Chang said traders may pursue claims that a large and, in their view, unnecessary late 2011 purchase by Kraft Foods Inc of wheat futures contracts violated the Sherman antitrust law and the Commodity Exchange Act.

In a 66-page decision, Chang also dismissed claims that the defendants conducted offsetting "wash trades" over roughly a decade to create an illusion of greater market activity. He said the traders can try to bring those claims again.

Kraft and Mondelez were named as defendants because most of the alleged suspicious activity occurred before Kraft Foods Inc split in two in 2012. Mondelez brands now include snack foods such as Oreos, Ritz crackers and Wheat Thins.

Many of the allegations were similar to those raised by the U.S. Commodity Futures Trading Commission in an April 2015 lawsuit against Kraft and Mondelez.

Last December, another judge rejected a defense motion to dismiss the CFTC lawsuit. Both companies have said Mondelez expects to bear most costs from that case, reports Reuters.

Mondelez believes any court-ordered fine or settlement would not be material to investors, the company spokeswoman said.

Kraft merged last year with H.J. Heinz Co to create Kraft Heinz, whose products include Kraft cheese, Heinz ketchup, Oscar Mayer deli meats and Maxwell House coffee.


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