The Securities and Exchange Commission is investigating Kraft Heinz over its accounting practices, the company said Thursday.
The company’s stock plunged more than 12% in after hours trading after revealing in an earnings report that regulators are looking into matters “including, but not limited to, agreements, side agreements, and changes or modifications to its agreements with its vendors.” The SEC sent a subpoena related to the matter in October 2018.
Kraft Heinz said it “continues to cooperate fully with the probe.” Kraft said it launched an independent counsel review of its procurement practices after it received the SEC subpoena. The company said it “recorded a $25 million increase to costs of products” as a result of that investigation, but that they “were immaterial to the fourth quarter of 2018.”
The SEC declined to comment.
Kraft, the maker of Velveeta cheese and Jell-O pudding, also posted a net loss of more than $12 billion for last quarter and said it wrote down $15 billion on its assets, based on “several factors that developed during the fourth quarter.”
Kraft Heinz and other food companies have faced pressure from Amazon, Walmart and Costco and lower prices.
Meanwhile, theprices of many commoditiesthat food companies use are rising, such as agricultural products and materials like aluminum and pulp for packaging.
Transportation costs have been putting pressure on food companies, in part because of a shortage of truckers in the United States.
