Cheese costs Kraft

USA – Kraft has said that commodity costs for dairy production division have slashed its profits for the second quarter of 2004.

Diluted earnings per share were down 25.5% on the same period in 2003, while operating income fell 23.7%. The company blamed increased commodity costs, higher marketing spending and asset impairment and exit costs for its restructuring programme announced in January.

Chief executive Roger Deromedi said: “Significantly higher costs for our key commodities, especially dairy, drove both the earnings decline in the quarter.” According to Kraft, the average cost of cheese in the second quarter was up 70% on