Kraft Foods Eager to Unharness from Altria's Yoke

31 August 2006

NORTHFIELD, Illinois: Kraft Foods, the world's second-largest packaged-food company after Nestlé, was conspicuous by its absence last year from a series of meetings on global obesity issues hosted in Geneva by the World Health Organization.

The empty seat at the table was the result of Kraft's close ties with Philip Morris, like Kraft owned by the Altria conglomerate. In the WHO's view, tobacco companies and their kin are about as welcome as Tom Cruise at a Paramount press conference.

Its exclusion from the WHO event is one of several reasons that Kraft is eager to unharness itself from the Atria yoke and what indiscreet executives sometimes call the "tobacco taint".

There are other advantages to a spinoff from Altria, not the least being that an independent Kraft would be free to grow via large stock-based acquisitions.

Altria, however, will not allow this as it needs to retain a stake in Kraft of at least an 80% to ensure that any future spinoff would be tax-free.

Data sourced from New York Times; additional content by WARC staff