Since October 1, 2012, Kraft Foods, has played an instrumental role in feeding the world with its wide assortment of edible products that has dominated the shelves of grocery stores from nation to nation. Kraft’s name, however, dates much further back than 2012. Kraft Foods Inc. has been in business since 1909, originally as J.L. Kraft and Bros. Company, before it was renamed in 1923 as National Dairy Products Corporation after it merged with Rieck McJunkin Dairy Co. Once this occurred, the company was listed on the New York Stock Exchange (NYSE) with the offer of 125,000 shares available for public purchase. Come 1924, it was renamed again to Kraft Cheese Company. Over time, Kraft’s growth after acquiring a number of acquisitions became immensely substantial by 1931 as it now had control of at least fifty companies. Now in 2022 and as one of the largest corporations in the world, it stands to reason Kraft Foods would earn itself a mixed bag of applause, controversy, and criticism that would result in a series of lawsuits taking aim at the company and what some deem as questionable practices. There are so many as Kraft has seen a number of big names come and go as executives and shareholders that are not always very popular among the people who pay attention to what goes on with Kraft.
From Humble Beginnings
Long before Kraft became a household name, a certain Canadian named James L. Kraft immigrated to the United States in 1903 at twenty-nine years if age, selling cheese in Chicago from door to door at a wholesale level. The first year of this business venture of his met with disappointment but soon picked up steam when his four brothers joined him to officially form J.L. Kraft and Bros. Company. Two years later, the door-to-door approach was met with advertisements and circulated recognition that would serve as instrumental tools to the company’s growth. Now with a solid business in their hands, the brothers established their company in New York City in 1912, preparing to bring their nationwide business to an international level. By the time 1914 came around, Kraft had a roster of thirty-one different cheese products that were available for consumer consumption across the United States of America. The credit for this achievement falls on the combined formula of heavy product development and marketing schemes. When the invention of pasteurized processed cheese came about thanks to Kraft, this improvement in the product’s ability to have a decent shelf life as opposed to the need for refrigeration became a favorite food choice for the American soldiers who fought in World War I. Used as rations, the processed cheese product became a patented product in 1916 that saw six million pounds worth sent to the U.S. Army at that time. It was also in 1916 that Kraft would bring on board a Canadian cheese company as its first acquisition. From that point forward, acquisition after acquisition, Kraft grew into the conglomerate we know of today.
Corporate Giant Headaches
Today, calling Kraft a corporate giant would be an understatement. Some of the biggest name brands that fill up the cupboards, fridges, and freezers of consumers include not only the company-named products but items from Cadbury, Maxwell House, Nabisco, Oscar Mayer, and Trident, just to name a few. As a corporate giant with so many acquisitions and having the kind of consumer reach it has, Kraft’s ability to avoid any kind of legal entanglements have met with so many challenges that it seems impossible for this corporation to stay out of trouble for long. Despite the controversies, Kraft always manages to somehow survive the headache of one issue after another as the demands of businesses, governments, and consumers continue to change as often as the direction of the prairie wind.
10. Dr. David Glover vs. Kraft Heinz Foods Co. ($1,000,000 USD minimum)
In the story shared by WIS-10 News, a former employee from one of Kraft’s facilities filed an official legal complaint against Kraft as of February 22, 2019, demanding compensation for damages the corporation caused against over an incident involving hand sanitizer found in one of the company’s poultry production line. Upon discovery the sanitizer had contaminated the meats, along with questionable executive decisions made by company management, this has become a legal battle that has not entirely resolved itself as Kraft is notorious for appealing decisions that put them on the losing side of the argument. Although the final amount has not been disclosed as of yet, since Glover’s termination in 2017, plus the damage done to his reputation, the estimated total, so far, in question sits at about
9. Blue Cross and the United States of America vs Kraft ($1,036,000 USD)
In the Justia US Law published documentation, Jess and Barbara Kraft appealed a court’s judgment against them in regards to questionable actions they committed against the insurance company known as Blue Cross. These actions include mail fraud, as well as illegal distribution of controlled substances, and putting forth misinformation in the income tax documentation. This was not a simple case as Kraft appealed the original court decision that illustrated their wrongdoing that began in 1981. As of April 7, 1993, this appeal made by Kraft against Blue Cross and the United States of America once again placed them on the losing side of the argument.
8. Kraft vs. Federal Trade Commission (FTC) ($15 Million USD)
In 1992, the FTC went after Kraft’s multiple violations against the FTC’s Federal Trade Commission Act. Long before multiple class-action suits and lawsuits sprung up that questioned the integrity of Kraft and the ingredients put into their food products, the FTC observed this corporation exercising a practice of business that was unethical. Although there were no official dollar amounts to be found at this time, there has been a revelation this was a multi-million dollar decision that allowed the FTC to force Kraft to fork out big money as retribution for actions that put them in the wrong according to the eyes of the court. For a throughout briefing of what FTC’s argument was against Kraft, this has since become a University of Miami Law School Institutional Repository read. Bottom line, it wasn’t the dollar value that makes this such a big lawsuit. What does make it a big deal is Kraft’s business practices earned the scorn of a government department that holds corporations like Kraft accountable for all the actions they do, regardless of whether it’s good or bad. This case began in 1992 and ruled in favor of the FTC and was continually challenged by Kraft all the way into 2013. In the end, the $15 million USD in fines owing ruled in favor of the FTC.
7. Ferron vs. Kraft-Heinz ($16 Million USD)
At the moment, Ferron is still in the process of building what could be a massive class-action lawsuit against Kraft-Heinz over the corporation’s coffee brands, Maxwell House and Yuban. Apparently, any purchases that were made between August 27, 2015, and January 18, 2021, have witnessed customers not getting what they paid for in what would be one of many false advertising and labeling practices that still plague Kraft to this day. Kraft has already agreed to pay up to $16 million USD in a settlement that would see each consumer able to prove their purchase compensated accordingly. While the lawsuit itself may not sound like such a big deal, what it has done is demonstrate how often Kraft gets itself into hot water each time they deceive the consumers with ads and labels that don’t match what they’re actually selling.
6. Race Wars, Kraft Heinz Style ($30 Million USD)
MSN has it reported three former employees of Kraft Heinz have filed complaints against the corporation’s management for approximately $30 million USD as victims of racial injustice due to the color of their skin. The story of the matter begins in 2012 as these workers endured approximately six years’ worth of abuse in what was deemed by them as a toxic environment. So far, the matter is still being investigated and the plaintiffs hope their case is strong enough to give them the compensation they seek.
5. – Weist V Lawsuit ($32 Million USD)
In the article shared by Frost Law Firm, Kraft was court-ordered to pay $32 million USD to Robert Weist and his family due to the lethal exposure of asbestos that resulted in the ailment and death of his wife, Kathy Lynn. He, along with his two other members of the Weist household worked at the Kraft-owned Louis Rich Co. facility in South Carolina during the 1980s. The contractor Kraft used in the construction of this facility was Metal Masters, Inc. Both of these companies, despite their argument, were found guilty of negligence causing bodily harm, and death. On Frost Law’s website, there is YouTube coverage of the four-day trial, laying out the details of where Kraft went wrong and why they needed to clean their act up as a responsible employer.
4. Securities Exchange Commission (SEC) vs Kraft-Heinz ($62 Million USD)
According to New York Times, Kraft-Heinz was ordered to dish out $62 million USD to SEC as they were found guilty of falsifying supplier contracts in order to achieve cost savings in its multi-year accounting scheme. This misconduct laid out false information about Kraft’s earnings, inflating the actual earnings amount from 2015’s last quarter to 2018’s in hopes to deceive the investors. When truths were revealed during the course of the investigations triggered by this lawsuit, Kraft was forced to pay what was owed as a civic penalty, under the agreement to never commit such violations again.
3. Starbucks vs. Kraft ($2.7 Billion USD)
When Starbucks took it upon itself to pull away from Kraft Foods Inc. at an earlier date than the agreed contract dictated, this cost the coffee chain $2.7 billion USD when the legal argument was ruled in Kraft’s favor on November 19, 2013. One of their acquisitions, Mondelez International, Inc. was the official recipient of this lawsuit as it was their product line that supplied Starbucks while the contract was respected. This was a three-year lawsuit filed by Kraft as the corporation sought compensation when Starbucks chose to end this business partnership early. According to Starbucks, Kraft breached the contractual agreement to the point where they simply wanted out. This costly decision saw the arbitrator side with Kraft as they found the argument laid out by Starbucks wasn’t sufficient enough to justify their actions.
2. Kraft vs. Shareholders ($15.4 Billion USD)
According to Routers, the combination of Kraft-Heinz owes $15.4 billion USD after attempting to conceal the impact of costs that affected the shareholders involved. This served as a costly violation once the U.S. Securities and Exchange Commission managed to reveal Kraft’s failure to aggressively cut costs which saw scores of consumers and suppliers spend their already overstretched dollars on cheaper brands. The investigation revealed enough evidence to prove Warren Buffett and his Berkshire Hathaway Inc knowingly kept important information away from the shareholders and purposely misled them with optimistic statements that simply weren’t true.
1. False Advertising Claims and Lawsuits ($100 Billion USD minimum)
Whether filed separately or as something similar to 2010’s class-action lawsuit filed by two people from California against Kraft, the continual claims the corporation misleads the public with false advertising has never gone away since the 2003 lawsuit filed by Stephen L. Joseph. The increasing awareness much of Kraft’s dietary products are not as the labels suggest has sparked more than enough controversy that still has many consumers refusing to have anything to do with their products to this day. When documentation comes from reputable sources like Kraft Class Action, points out some of Kraft’s practices, it supports the growing number of arguments made by other lawsuits that Kraft Foods needs to stop making denials about their business practices and step up to take the concerns of so many consumers more seriously. Lawsuits and decisions made by stubborn consumers who refuse to spend so much as a dollar to support Kraft have cost the corporation millions. However, it seems like it’s not enough to put a serious enough dent as Kraft still continues to plow forward with an attitude that has remained unchanged even as some of these lawsuits continue to wage on. One of the more recent stories about lawsuits like this is featured in an article presented by Top Class Actions, which puts Kraft’s infamous Mac and Cheese product into the fray as a product that has been deemed too unhealthy for consumer consumption. So far, factoring in this ongoing legal battle that still sees a growing number of plaintiffs filing complaints against Kraft, the demand for compensation and legal fees has so far reached the $100 USD billion mark. This total is expected to keep growing until the matter is finally resolved.