Kraft facing wheat price fixing allegations

Multinational food giant Kraft is facing allegations of wheat price fixing.

In a statement late on Wednesday, the US Commodity and Futures Commission (CTFC) alleged that Kraft and its former subsidiary Mondelez Global bought $90m (£62m) of wheat futures without any intention of taking delivery of it.

Kraft, which is currently undergoing a merger approval process with Heinz, spun off Mondelez as a separate snacks business entity in 2012.

Mondelez’s brand portfolio includes Oreo, Toblerone and Cadbury’s, with the latter acquired by Kraft in 2010.

The CTFC said the huge position both parties took in the market raised the price of Wheat thereby netting Kraft and Mondelez a profit of $5.4m.

The regulator is taking legal action and intends to apply a permanent injunction on future violations.

The allegations if proven could also see Kraft incur financial penalties. The company was unavailable for comment.