Actor asks Kraft to take biotech out of its U.S. food
By Sandra Guy
Chicago Sun-Times, April 23, 2003

Call it National Lampoon's Kraft vacation.

Chevy Chase, the actor known for the "National Lampoon" movies, asked Kraft Foods executives Tuesday to remove genetically engineered ingredients from the food it sells in the United States, and warned of the risks to the food supply of crops grown to produce pharmaceuticals.

"I don't want my family to accidentally ingest a pig vaccine when they eat an Oreo, or inadvertently eat a blood clotter (medication) when they pour a bowl of Alpha-Bits," Chase said at Kraft's annual shareholders' meeting in East Hanover, N.J.

Chase's wife, Jayni, who expressed her concerns as a mother of three daughters, is active in the organic foods movement.

Because of consumer outcry outside the United States, Kraft prohibits genetically altered ingredients in the products it sells in Europe.

Kraft Foods' Chairman Louis Camilleri, who is also CEO of Kraft's parent company, Altria Group (formerly called Philip Morris Cos.), said federal regulators have approved biotech ingredients for use in food, and that biotech products can have nutritional and environmental benefits.

Camilleri agreed with Chase on the importance of segregating so-called biopharm crops from the regular food supply. Kraft Co-CEO Betsy Holden, who heads Northfield-based Kraft Foods, recently urged the U.S. Department of Agriculture to impose stricter rules to ensure that biopharm crops don't commingle with the food supply. Holden shares the title with Co-CEO Roger Deromedi, who is in charge of Kraft's operations outside North America.

Camilleri also told shareholders that Altria has no plans to dip into Kraft's cash coffers to pay for the costs of tobacco lawsuits against the parent company and its Philip Morris subsidiary.

"We have no intention of upstreaming cash from Kraft," Camilleri said.

Kraft, whose cash flow is expected to jump at least 10 percent this year to $2.8 billion, has suffered from debt-ratings downgrades because of its ties to the cigarette companies. Altria owns 84 percent of Kraft's outstanding shares of common stock.

Kraft got a reprieve Tuesday from Moody's Investors Service, which left Kraft's debt ratings unchanged at A3 because of Kraft's stable outlook.

Moody's cut Altria's long-term credit ratings to Baa2 from Baa1, leaving it two steps away from junk status because of the bond the cigarette maker must put up to appeal a $10.1 billion Downstate verdict in a case involving light cigarettes.

Though Kraft remains constrained by its higher borrowing costs, food analysts expect it to continue growing by acquiring other companies. Kraft is believed to have its eye on Heinz, whose ketchup, tomato juice and Boston Market frozen meals would fit well with Kraft's Grey Poupon mustard, fruit juices and meals-in-a-box.

In the meantime, Kraft is slashing costs by cutting jobs and overlapping businesses resulting from its merger with Nabisco, and is attacking new products with a vengeance, including introducing a coffee-flavored Oreo.

Kraft also has introduced Altoids breath-freshening strips and a new refrigerated meal kit.

The company must contend with leadership changes as it does so. Denise Morrison, former general manager of Kraft's snacks division, was hired this week by Campbell Soup Co. as its president of global sales and chief customer officer. Kraft named Michael Senackerib, 37, who started his career in 1989 at General Foods, to succeed the 49-year-old Morrison. Senackerib had been vice president of marketing in Kraft's crackers and biscuit division for the last three years.

Also, Calvin J. Collier, 61, Kraft's general counsel and senior vice president for the last 15 years, will retire in early 2004 and be succeeded by Marc Firestone, 43, who is now general counsel for Philip Morris International.