SEC focuses on food firms in Ahold probe
Apr 4, 2003 12:00 PM, from staff and wire reportsThe Securities and Exchange Commission (SEC) contacted Tyson Foods, Kraft Foods, H J Heinz, Sara Lee, and General Mills as part of an investigation into Royal Ahold’s distribution business, according to a Bloomberg News report.
A Netherlands-based supermarket and foodservice operator, Ahold has major holdings in the United States. It disclosed Feb 24, 2003, that operating earnings for fiscal year 2001 and expected operating earnings for fiscal year 2002 were overstated by an amount the company believes may exceed $500 million.
The accounting practices of Ahold’s US Foodservice have drawn SEC scrutiny, including how the firm reported discounts from suppliers. Manufacturers sometimes give retailers rebates to discount their brands or provide them prime shelf space. In recent years, sales pressure has risen as retailers and wholesalers consolidated and profit margins were squeezed.
ConAgra Foods has said that Ahold’s auditors asked the company for information. Both ConAgra and Sara Lee disagreed with a recent Wall Street Journal report that the SEC may include them in its probe.