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Kraft

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Learn more about corporations VOTING to rewrite our laws.

This article is part of the Center for Media & Democracy's spotlight on global corporations.

Kraft (Kraft Foods Inc.) is the largest packaged food company in the U.S. and second only to Nestlé in terms of world sales. Its North America unit makes the world's top selling cheese brand (Kraft). Other brands under the Kraft label include Nabisco and Oreos. U.S. brands are also sold internationally. Altria (formerly Philip Morris), spun off Kraft in 2007. In 2010, Kraft had total revenues of $49.21 billion. [1]

Kraft CEO, Irene Rosenfeld, received total compensation of $26.3 million in 2009, making her the United States' second-highest-paid female. [2]

Ties to the American Legislative Exchange Council

Kraft was on the corporate ("Private Enterprise") board of the American Legislative Exchange Council (ALEC) until it announced it would not renew its ALEC membership on April 5, 2012.[3]

In an email from Kraft Corporate Affairs Director Susan Davison, Kraft Foods announced it wouldn't renew its membership in ALEC upon its expiry in spring 2012. This announcement followed on the news that Coca-Cola and Pepsi had also left ALEC. The Center for Media and Democracy's executive director, Lisa Graves, and leaders from other public interest groups including Color of Change (CoC), Common Cause and the NAACP had attempted to deliver a letter asking the ALEC chairmen of its legislative and corporate boards to "fully disclose ALEC's financial relationship with all NRA entities, including any contributions, sponsorships, in-kind support or other support ALEC has received" the week before Kraft's announcement. CoC announced a public boycott of Coca-Cola and other ALEC corporate board members earlier the week of the announcement, joined by other public interest groups.[4]

A list of ALEC corporations, can be found here. A list of other corporations which have cut ties with ALEC can be found here.

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


Derek Crawford, District Director for State & Local Government Affairs of Kraft Foods Global, Inc., had been Kraft's representative on ALEC's corporate board as of 2011.[5] Crawford had also represented Kraft on ALEC's Commerce, Insurance and Economic Development Task Force and Tax and Fiscal Policy Task Force.[6] Furthermore, Kraft was a "Trustee" level sponsor of 2011 American Legislative Exchange Council Annual Conference, which in 2010, equated to $5,000.[7] Kraft was also a sponsor of the ALEC Kids Congress for the 2011 ALEC Annual Meeting in New Orleans, Louisiana.[8]

Lobbying and Political Contributions

Open Secrets reports that in 2010, Kraft's PAC contributed $454,918 to federal candidates, with 51% going to Democrats and 48% to Republicans.[9]

In 2010, Open Secrets reports that Kraft spent $3.65 million on lobbying. $3 million was spent on in-house lobbyists and $650,000 spent on lobbying firms including Capitol Tax Partners; Intl Business-Government Counsellors; Leonard & Co.; Olsson, Frank & Weeda; and Russell & Barron.[10]

A full list of bills lobbied for can be seen HERE.

Kraft Foods is a member of the American Meat Institute. [11]

Products

The company's Oscar Mayer, Kraft, Philadelphia, Maxwell House, Nabisco, Oreo, Jacobs, Milka, and LU brands all have revenues of at least $1 billion and over 50 other brands regularly hit the $100 million mark.[12] Some of Kraft's other U.S. brands include: General Foods International, Gevalia, Maxwell House, Sanka, Yuban, Country Time, Crystal Light, Kool-Aid, Tang, Oscar Mayer, Louis Rich, DiGiorno, Jack's, South Beach Diet, Tombstone, Velveeta, Boca veggie burgers, Cheez Whiz, Breakstone's sour cream, Shake ‘n Bake, Cool Whip, Jell-O, Post cereals, Chips Ahoy!, Ritz and Fig Newtons.[13]

Kraft's $19 billion offer to acquire Cadbury was accepted by a majority of Cadbury shareholders in 2010. Warren Buffett's Berkshire Hathaway owned 9.4% of Kraft; Buffet opposed the Cadbury deal and sold 1/3 of Berkshire's stake in Kraft. [2]

Marketing to Children

After "a major government-commissioned study found advertising contributes to childhood obesity" and two bills before Congress "proposed regulation of children's advertising," Kraft, "the nation's biggest food company," knew it "risked being depicted as a corporate villain." So, in January 2005, the company "announced it would quit advertising certain products to kids under 12." [14] The announcement came on the same day that the federal government released its updated 2005 Dietary Guidelines for Americans, likely in an attempt to appear aligned with concept of healthy eating.

The announcement also came two weeks prior to a planned presentation for the Institute of Medicine committee on food marketing to children. Kraft's timing was critical to demonstrating to a prestigious government advisory body that self-regulation was working fine.[15] In September 2005, Kraft CEO Roger Deromedi presented Kraft's modified marketing to children policy (expanded to include websites), which included the launch of several new, "healthier" products such as Whole Grain Chips Ahoy cookies, at the Summit on Health, Nutrition and Obesity organized by California Governor Arnold Schwarzenegger. For this, Kraft earned a spot on Schwarzenegger's honor roll of companies making significant commitments to solving the obesity problem.

While Kraft agreed to not market some of its products to children ages six to eleven, including original Kool-Aid, Oreos, and several Post cereals, other products were aimed specifically at the six to eleven age group, including sugar-free Kool-Aid, Chicken Dunks Lunchables Fun Pack, and 1/2 the Sugar Fruity Pebbles. These products, according to Kraft, offer "beneficial nutrients or a functional benefit," and are thus part of the Sensible Solution labeling program, a Kraft-defined nutritional stamp of approval.[16] Rather than reduce overall advertising expenditures for marketing aimed at kids, Kraft has simply changed the way these funds are allocated.

The media dutifully furthered Kraft's public relations efforts. For example, a headline in the Chicago Tribune read:

"Kraft Will No Longer Aim Ads for Unhealthy Snacks at Youngsters." [17]

'Taking control' of discussion

While some criticized Kraft's continued use of cartoons and questioned whether the company should be able to decide "what's healthy and what isn't," policymakers praised Kraft. Kraft's strategy was inspired by its sister company, Philip Morris. By "taking control of the discussion about marketing to children", Kraft hoped to "avoid Philip Morris's initial mistakes." According to Kraft's Michael Mudd:

"If the tobacco industry could go back 20 or 30 years, reform their marketing, disarm their critics, and sacrifice a couple of hundred million in profits, knowing what they know today, don't you think they'd take that deal in a heartbeat?" [18]

Inserting product placements into children's video games

Kraft has also created a series of children's websites, such as NabiscoWorld and Postopia, that incorporate ad messages for Oreos, Chips Ahoy, and others into free video games. In 2005, Kraft declared to have only Sensible Solution products on Kraft websites aimed at kids by the end of 2006, though in the meantime, the websites continued to promote non-Sensible Solution products. Even the industry-friendly Children's Advertising Review Unit admonished Kraft's "Pizza and Treatza" game on its Lunchables website for depicting "Lunchables" as a balanced meal as well as denigrating homemade lunches. [19]

School policies

While Kraft claims to have "eliminated in-school advertising", Kraft products are still sold in schools (although only those which meet the Sensible Solutions criteria). The product packaging for the Sensible Solutions line look virtually identical to the non-advertised regular products (even after vice president Mark Berlind assured that Kraft would change the "look and feel" of its "healthier" products).[20], [21]

Tobacco involvement

Labeling for rBGH

Kathleen Linehan, a lobbyist for Kraft parent company Phillip Morris, described the company's efforts to defeat public interest legislation at all levels of government and in the military in a 19-page, confidential memo from 1993. Beyond simply lobbying on tobacco issues, PM utilized its food and food and drink subsidiaries to defeat measures aimed at protecting and educating consumers as well as benefiting the environment. Ms. Linehan noted that KGF (Kraft General Foods) worked to oppose legislation mandating that milk be labeled as to whether it contains Bovine Growth Hormones (rBGH), an artificial hormone injected into dairy cows to increase milk production:

"because of the precedent this sets for other biotechnologies that may contribute to future food production or processing."[22]

For more information on Bovine Growth Hormones, See also FDA, section 4.

'Recycling not the answer'

She also reveals that PM works through Kraft to fight laws banning the proliferation of non-recyclable packaging (specifically juice boxes and "Capri Sun"-type foil containers, which are made of an unrecyclable composite of paper and aluminum). PM/KGF (which makes a large number of packaged foods like macaroni and cheese, cream cheese, juices and other products) also fight laws mandating the increased recycling of trash, and that PM-drafted legislative bills ("incentive-based alternatives" to mandatory recycling laws) were actually passed in three states (Colorado, Texas and Vermont) by the end of 1994. According to Linehan, PM promotes the view in state and federal legislatures that:

"recycling is not the answer to solid waste management." [23]

A 1993 PM Corporate Affairs Presentation also indicates that PM mobilizes Kraft employees to create fake "grassroots" efforts to fight laws the company doesn't like, such as public smoking restrictions. The 47 page presentation, given by VP of Corporate Affairs Ellen Merlo to PM suppliers, talks about methods used to defeat clean indoor air laws:

"Fortunately, we have good, strong allies we can depend upon when the going gets tough including...the more than 100,000 employees of the various Philip Morris operating companies in the U .S .including Kraft General Foods and Miller Brewing; and you, our major suppliers." [24]

See also Undermining public interest legislation.

Animal testing

Kraft does animal testing.

Facility information, progress reports & USDA-APHIS reports

For links to copies of a facility's U.S. Department of Agriculture (USDA)-Animal Plant Health Inspection (APHIS) reports, other information and links, see also Facility Reports and Information: Sherburne Pet Food Testing Center, East Hanover, NJ. [25]

USDA AWA reports

As of May 26, 2009, the USDA began posting all inspection reports for animal breeders, dealers, exhibitors, handlers, research facilities and animal carriers by state. See also USDA Animal Welfare Inspection Reports.

Personnel

Key executives

  • Irene Rosenfeld - Chairman & CEO - $26.3 million in 2009, United States' second-highest-paid female. [2]
  • David Brearton - Executive VP, Operations & Business Services
  • Michael Clarke - Executive VP & President, Kraft Foods Europe
  • Marc Firestone - Executive VP, Corporate & Legal Affairs & General Counsel
  • Sanjay Khosla - Executive VP & President, Developing Markets
  • Karen May - Executive VP, Global Human Resources
  • Timothy McLevish - Executive VP & CFO - $4.31 million[26]
  • Jean Spence - Executive VP - Research & Development
  • W. Anthony (Tony) Vernon, Executive VP & President, Kraft Foods North America
  • Mary Beth West - Executive VP & Chief Category & Marketing Officer[27]

Contact

Three Lakes Drive
Northfield, IL 60093

Phone: 847-646-2000

Fax: 847-646-6005

Web address: http://www.kraft.com

Articles & sources

SourceWatch resources

References

  1. Kraft Foods profile, Hoovers, accessed July 9, 2011.
  2. 2.0 2.1 2.2 Irene Rosenfeld profile, Forbes.com, accessed July 9, 2011
  3. Barbara Liston and Martinne Geller, UPDATE 4-Coke withdraws from group that backs Stand Your Ground law (Adds Kraft Statement), Reuters, April 6, 2012
  4. Rebekah Wilce, BREAKING: Intuit Out of ALEC; Coke, Kraft, Pepsi, too, while Koch Stands Ground, PRWatch.org, April 6, 2012
  5. American Legislative Exchange Council, Private Enterprise Board, organizational website, accessed July 8, 2011.
  6. American Legislative Exchange Council, Derek Crawford, organizational biography, accessed July 9, 2011.
  7. [American Legislative Exchange Council, 2011 Conference Sponsors, conference brochure on file with CMD, August 11, 2011]
  8. [American Legislative Exchange Council, 2011 Kids Congress, conference brochure on file with CMD, August 11, 2011]
  9. Center for Responsive Politics, Kraft Foods 2010 spending,"Open Secrets," accessed July 9, 2011.
  10. Center for Responsive Politics, Lobbying Firms - Kraft,"Open Secrets," accessed July 9, 2011.
  11. Animal Welfare, Kraft website, accessed July 9, 2011.
  12. Company Profile: Kraft Foods, Inc., Hoovers, accessed April 2010
  13. Our Brands, Kraft, accessed January 2011
  14. Sarah Ellison Why Kraft Decided to Ban Some Food Ads to Children, Wall Street Journal, October 31, 2005
  15. Michele Simon, Appetite for Profit: How the Food Industry Undermines Our Health and How to Fight Back, pg 124, Nation Books, October 2006
  16. Michele Simon, Appetite for Profit pg. 125, 126, Nation Books, October 2006
  17. Delroy Alexander, "Kraft will no longer aim ads for unhealthy snacks at youngsters", Chicago Tribune, January 2005
  18. Sarah Ellison, "Why Kraft Decided to Ban Some Food Ads to Children Company , Wall Street Journal, October 31, 2005
  19. Michele Simon,Appetite for Profit , pg. 129-132, Nation Books, October 2006
  20. Michele Simon,Appetite for Profit , pg. 129-132, Nation Books, October 2006
  21. Kraft Advertising Responsibility to Children, accessed October 2008
  22. Linehan, KM Washington Outlook for 940000, Tobacco Legacy Library, December 29, 1993
  23. Linehan, KM Washington Outlook for 940000, Tobacco Legacy Library, December 29, 1993
  24. Merlo, E. Remarks by Ellen Merlo, VP, Corporate Affairs, Philip Morris, USA, Tobacco Legacy Library, January 25, 1994
  25. Facility Reports and Information: Sherburne Pet Food Testing Center, East Hanover, NJ, Stop Animal Experimentation NOW!, accessed January 2011
  26. Kraft Executive Profiles,"Bloomberg BusinessWeek"
  27. About us: Management Team, Kraft Foods, accessed January 2011

External articles

External resources

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