Food Giants Caught Up in DoJ Investigation into SK Foods

Purchasing managers from food giants such as Kraft, Safeway, Frito-Lay and B&G have been implicated in the US Justice Department’s (DoJ) investigation into SK Foods, which has seen the CEO of SK Foods arrested for selling old and misleading products.

Bribes were allegedly given to employees of manufacturers and processors to give SK Foods proprietary information about rival bids and to make sure the companies bought from them.

Former owner and CEO of SK Foods Frederick Scott Salver was arrested a week ago for fraud in connection with unfair trade practices.

He allegedly endorsed price fixing, bribery and false labelling practices that led to consumers paying for products that were not what they were told, from organic to fresh.

Several other employees of SK Foods, one of America’s largest tomato processors, have already pleaded guilty to racketeering, money laundering and conspiring to eliminate competitors.

Nine employees of SK Foods in California allegedly gave out $330,000 in bribes between 1998 and 2008.

This new push against unfair business practices in the food industry first started in 2007 when the DoJ began investigating SK Foods following allegations it was tricking manufacturers into buying inferior quality tomato paste labelled at a much higher grade.

The company was then accused of shutting competitors out of deals with major processors and supermarkets, allowing them to charge up to 30% more for their product.

According to the DoJ, there are items on every aisle of US grocery stores that are tied to the federal investigation.

Starting next month, the Departments of Justice and Agriculture will start investigations into similar allegations in the dairy, grain, livestock and poultry sectors.