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The
CFTC in April accused Kraft Foods and Mondelez of making massive
bets in Chicago's futures markets in late 2011 as part of a plot
to drive down the physical price of wheat they used in products
such as Oreo cookies and Ritz crackers.
The CFTC said the companies had violated speculative position
limits and engaged in numerous noncompetitive trades in wheat.
Kraft made reasonable business decisions to maintain a steady
wheat supply in the face of a "dysfunctional" wheat market where
cash prices bore little relation to those on the futures market,
the companies said in a court filing on Monday.
The company's actions in 2011 "tell a straightforward story of a
snack-food company doing the best it could to purchase wheat at
sound prices in a difficult market," they said.
Kraft spun off its snacks business into Mondelez in 2012. CFTC's
complaint focused primarily on trading that occurred before the
split.
The companies sought dismissal of the two counts saying CFTC's
allegation that wheat prices changed as a result of Kraft's
transactions was insufficient to infer it deceived or
manipulated the market.
Also, Kraft's attempt to obtain the best wheat price necessarily
means it lacked the "ability" or "intent" to create an
"artificial price," the companies said in the filing.
Reuters could not immediately reach the CFTC for comment outside
regular U.S. business hours.
The case is U.S. Commodity Futures Trading Commission v. Kraft
Foods Group Inc and Mondelez Global LLC, U.S. District Court,
Northern District of Illinois, No. 15-cv-02881.
(Reporting by Supriya Kurane in Bengaluru; Editing by Anupama
Dwivedi)
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