Heinz Kraft merger may start major shake-up of food industry

Between them, Heinz and Kraft produce a huge range of products that can be found on Australian supermarket shelves. (Flickr: Steve Snodgrass)

A merger between giant global food manufacturers Heinz and Kraft will create the fifth largest food and beverage business in the world.

Heinz, which is majority owned by Brazilian investment firm 3G, will have control of the new entity, which expects to generate $1.5 billion in cost savings.

Analyst Robert Chesler, from FC Stone in Chicago, said it could start a major shift for food manufacturing worldwide.

"We're going to continue to see that there is a lot of money out there sitting on the sidelines that's continuing to come into play," he said.

"I think people believe there will be more to come of this ilk and so this is probably not the last of this type of play we're going to see in the year of 2015."

Together, the companies produce a wide range of products available in Australia, including, sauce, juice, mayonnaise, baked beans, biscuits, crackers, pasta, baby food, cheese and spreads.

It is now yet known what the merger will mean for farmers and suppliers of both Heinz and Kraft, but Mr Chesler believed any change would not become evident for at least 12-18 months.

Source : ABC Rural    Warwick Long   March 26th 2015