Updated at 2:28 p.m. ET
The Kraft and Oscar Mayer brands are worth a lot less — as much as $15.4 billion less than they did.
Big name brands have been under pressure to cut costs as consumer tastes have been changing. Many are turning to cheaper store brands or are doing their shopping online.
One possible sign of that shift came Thursday when Kraft Heinz Co. — which sells well-known packaged food brands including Kraft Mac and Cheese, Oscar Meyer hot dogs and Jell-O — announced a big quarterly loss and that its Kraft and Oscar Mayer brands were were worth billions less than previously stated.
The company, which was formed when Heinz and Kraft merged in 2015, said it lost $12.6 billion in the fourth quarter, compared with an $8 billion profit a year earlier.
On Friday, its stock dropped 28 percent after the company announced the bad financial results and said the Securities and Exchange Commission is investigating its “accounting policies, procedures, and internal controls” related to vendor agreements.
After receiving a subpoena from the SEC for documents, Kraft Heinz said the company launched an investigation into its work with suppliers and other vendors. As a result of that investigation, it said it recorded a $25 million increase to the cost of its products.
Kraft Heinz said it is making “certain improvements to its internal controls to mitigate the likelihood of this occurring in the future and has taken other remedial measures. The Company continues to cooperate fully with the U.S. Securities and Exchange Commission.”
The bad news didn’t stop with the SEC probe. The company also announced a 36 percent cut in its quarterly dividend.
Warren Buffett’s Berkshire Hathaway is Kraft Heinz’s largest shareholder. In 2015, Buffett teamed up with 3G Capital, a Brazilian-American hedge fund, to take majority control of Kraft Heinz. Berkshire stock was down 1.6 percent Friday afternoon.