Mondelēz, Kraft granted partial win against CFTC in wheat manipulation settlement

By Gill Hyslop contact

- Last updated on GMT

An Illinois judge has ruled in favour - 'in part' - of Mondelēz and Kraft Heinz. Pic: GettyImages/BCFC
An Illinois judge has ruled in favour - 'in part' - of Mondelēz and Kraft Heinz. Pic: GettyImages/BCFC

Related tags: Mondelez International, Kraft heinz, US Commodity Futures Trading Commission, judgement

Mondelēz and Kraft Heinz have been handed a win – ‘in part’ – in their battle with the US Commodity Futures Trading Commission (CFTC) over a $16m fine they had agreed to pay in August last year to settle a wheat manipulation case dating back to 2015.

The settlement involved the monetary penalty, along with a gag order preventing the parties to make public statements on the case beyond referring to the court record.

However, the two food giants claim the US regulator and two of its commissioners violated that deal.

The CFTC argued the gag clause bound only the agency, not its commissioners, and that its own statements had not violated the agreement.

Kraft Heinz and Mondelēz said they 'strongly disagreed' with CFTC’s statements, which ‘blatantly violate and misrepresent the terms and spirit of the consent order.’

They asked a judge in the Northern District of Illinois to hold the CFTC and the commissioners in contempt of court, along with 11 other orders and findings, which were redacted in court filings.

Judge John Robert Blakey said he would grant the two companies 'in part', “given the egregious misconduct”​ by the CFTC, according to a court filing. However, what parts have been granted are not immediately clear. A notice on the court’s document said a written order will be issued later.

The case in question

In 2015, CFTC charged that Kraft Food had bought $90m of Chicago-listed wheat futures in December 2011, which gave it a dominant position in the market, although it never intended to take possession of the grain.

The CFTC alleged the move created the illusion of strong demand and caused an artificial price fluctuation that earned the company more than $5m in profits.

Kraft Foods demerged in 2012 to become two separate companies: Mondelēz and Kraft Heinz.

Mondelēz declined to comment, and the CFTC and Kraft Heinz had not responded to our request prior to the story being posted.

Related topics: Kraft Foods, Commodities, Manufacturers

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