Berkshire Hathaway writes down Kraft Heinz investment
Berkshire Hathaway reported a $3.76 billion write-down on its investment in Kraft Heinz during the second quarter, acknowledging that the initial valuation of the food conglomerate was too high and is now being adjusted. Berkshire Hathaway owns over 27% of Kraft Heinz shares. This write-down contributed to a 4% decrease in Berkshire hathaway’s quarterly operating profit, even tho the company still holds over $344 billion in cash. Kraft Heinz, known for brands like Oscar Mayer, Kool-Aid, and Jell-O, has been reformulating its products for healthier alternatives, such as removing artificial dyes-switching to natural colorants like turmeric and paprika. The company announced plans to eliminate all chemical dyes from its products by 2027, with 90% already dye-free. Recently, Berkshire Hathaway representatives resigned from Kraft Heinz’s board. Kraft Heinz also met with Health and Human Services officials as part of efforts to reduce food additives, aligning with the “Make America Healthy Again” initiative.
Berkshire Hathaway writes down Kraft Heinz investment
Berkshire Hathaway reported a $3.76 billion write-down for its shares in Kraft Heinz during its second quarter.
This write-down reveals Berkshire Hathaway’s admission that its initial investment into the food conglomerate was overvalued and is now correcting course. Berkshire Hathaway holds over 27% of all Kraft Heinz shares.
As a result, Berkshire Hathaway reported a 4% decrease in quarterly operating profit. The holding company still totes over $344 billion in cash.
Heinz sold its shares to Berkshire Hathaway in 2013, two years before the food company merged with Kraft. Ever since, the company has altered its food products for healthier alternatives.
For example, Kraft Heinz removed dyes from its Kraft Mac and Cheese, switching to turmeric and paprika for its orange color in 2016.
Kraft Heinz announced last month that it will put an end to chemical dyes in all its products by 2027. According to the company’s sales data, 90% of its products are already free of dyes.
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Before this announcement, Berkshire Hathaway employees resigned from the Kraft Heinz board.
Kraft Heinz, the parent company of brands like Oscar Mayer, Kool-Aid, and Jell-O, met with Health and Human Services Secretary Robert F. Kennedy Jr. in March, along with other food companies. The meeting centered on reducing food additives in products — a pillar of the “Make America Healthy Again” movement.
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