See’s Candies said a printing error resulted in it selling some Valentine’s Day chocolates as kosher when they weren’t, a problem brought to light by a federal lawsuit filed in California alleging “fraudulent inducement.”
See’s, a part of Berkshire Hathaway Inc. of Omaha since 1972, said that after learning of the lawsuit, it found that shelf cards for some of its candy were mistakenly printed with the symbol of Kosher Supervision of America (KSA), which designates food as kosher.
The company offered refunds and said it apologizes to customers who purchased the boxes.
The lawsuit, reported by the Law360 website, alleges that New Jersey resident Avi Weiss suffered damages when he bought some Classic Red Heart Assorted Chocolates in Los Angeles, thinking they were kosher, and that other purchasers also were harmed.
The lawsuit estimated the number of consumers as “thousands” and said the amount of money at issue is more than $5 million.
Kosher foods are prepared according to Jewish dietary law, and food manufacturers must follow those rules to display the kosher symbol.
See’s said the erroneous price cards were on shelves displaying one-quarter pound, one-half pound and one-pound valentine heart boxes.
“The price cards were replaced immediately in all shops ... and no longer include the KSA symbol,” See’s said. “No changes were necessary to the heart boxes as they do not show the KSA symbol as the product itself is not kosher, and are correctly labeled.”
See’s, which is based in South San Francisco, said it notified Kosher Supervision of America about the error and the correction, adding:
“See’s Candies is certified for several kosher products by KSA and has always treated its certification of See’s products with great respect. See’s assures that its production facilities meet KSA standards to achieve the certification.”
Weiss’ attorneys are David Parisi and Suzanne Havens Beckman of the Parisi & Havens law firm in Santa Monica, California, and Yitzchak Lieberman and Grace Parasmo of Parasmo Lieberman Law in Los Angeles.
The lawsuit said Weiss “strictly observes Kosher dietary laws and shops exclusively for Kosher certified items” and would not have bought the chocolates if the price sign had not had the kosher symbol.
The lawsuit alleges that See’s intentionally used the kosher symbol on products it knew weren’t kosher, violating laws aimed at protecting consumers and preventing false advertising. It says Weiss and others “overpaid for the product” or would not have bought the chocolates if they had known it was not kosher.
(See’s said the chocolates were priced the same as non-kosher products of the same type.)
The lawsuit asks the court to establish a nationwide class of consumers who bought See’s products with incorrect kosher labels over the past four years.
Could Berkshire develop sweet tooth for Tootsie Roll?
Speaking of sweets, why not Tootsie Roll?
Tootsie Roll Industries, founded by Austrian immigrant Leo Hirshfield in 1896, may be in play as an acquisition, Douglas Yu wrote for Food Navigator USA.
Longtime CEO Melvin Gordon died a year ago, and his widow, Ellen, 83, has been leading the Chicago-based company since, improving its distribution, delivery and manufacturing systems.
Sales and earnings grew in 2015, said analyst Marcia Mogelonsky of the London-based researcher Mintel Group Ltd., adding that the situation and the well-known brand may attract the interest of Berkshire CEO Warren Buffett.
Another potential suitor is Yildiz Holding, a Turkish company whose products include Godiva chocolates, Mogelonsky wrote.
Tootsie Roll ranks in the upper third of the top 100 global candymakers, an industry that has been consolidating.
Tootsie Roll’s revenues are small on Berkshire’s scale, at slightly more than $500 million a year. But in the past, Buffett has made exceptions to his desire for multibillion-dollar businesses that contribute substantially to Berkshire’s bottom line.
With Berkshire came a change at the Mart
A footnote to Friday’s story about Robert Batt, a member of the Blumkin family that operates Berkshire’s Nebraska Furniture Mart:
Ron Blumkin, Batt’s cousin and a top Mart executive, said that although the family continued running the Mart and the store’s philosophy remained intact after Buffett purchased majority control, some things changed.
“When you’re in a family business, it can be run more like a kingdom,” Blumkin told me. But in a publicly traded company, executives have a fiduciary responsibility to shareholders for the company’s assets.
At the Mart, that meant no more company cars for family members, Blumkin said. “Nobody told us, but that’s the right thing to do. Those sorts of things we did right away, to set an example. It’s what has to be done.”
‘That would sure get Coke’s shares moving’
Coca-Cola’s languishing stock price and Berkshire’s longtime stock holdings in the beverage company drew Bloomberg columnist Shelly Banjo’s attention.
Coke’s shares have gained about 10 percent in the past three years, compared with Pepsi’s 56 percent gain. Banjo cited adverse pressure from the strong U.S. dollar, health regulators’ concerns about sugary drinks and a declining global soda market.
“There’s no doubt Buffett’s outsized ownership of Coke — Berkshire Hathaway owns 9 percent of its shares — has deterred activist investors and given some protective cover to Coke CEO Muhtar Kent,” she wrote. Cutting costs, raising prices and reconfiguring Coke’s bottler network “did little to excite investors.”
“Maybe it’s time for the Oracle of Omaha to wade back into the space and get more involved in Coke, one of his longest-held companies. That would sure get Coke’s shares moving.”
Taking a lesson from Buffett in the U.K.
Investors in the United Kingdom, faced with declining stock market prices as are those in the United States, got a dose of Buffettology from the British website Interactive Investor, courtesy of Ben Hobson, an editor with Stockopedia.com.
Calling Buffett “the doyen of dealing with market swings,” Hobson noted Buffett’s view that investors worry less about falling prices if they own good-quality stocks and have a decades-long time horizon.
“Buffett’s view is that, when investors start associating price volatility with risk, they can, ironically, end up doing some pretty risky things,” Hobson wrote, such as trading too often, trying to time the market’s swings, not diversifying, paying unnecessary fees and using borrowed money.
“The lesson from Buffett is that market direction is less important than a sound, long-term investment plan,” the article said. “Decisions on buying or selling shares during periods of volatility need careful thought.”
Rocketing from millionaire to billionaire
Buffett became a millionaire at 30 and a billionaire at 56, a 26-year slog that was one of the slowest buildups among today’s self-made billionaires, Jennifer Walpole wrote for American Genius, based on figures compiled by Entrepreneur magazine.
Telecom mogul and investor Carlos Slim also took 26 years, from millionaire at 25 to billionaire at 51. The slowest was Sir Alan Sugar, founder of the British electronics firm Amstrad, a billionaire at age 68 after getting his first million 44 years earlier.
More recently minted billionaires, most of them propelled by technology, reached their status much quicker. The fastest woman among them is Meg Whitman, a millionaire at 40 and billionaire at 42, thanks to her work at Hewlett Packard Enterprise, HP Inc. and eBay.
The champ, of course, is Facebook founder Mark Zuckerberg, a millionaire at 22 and, after grinding away for an entire year, a billionaire at 23.
Hot dogs an ‘obvious’ choice for Burger King
You want a hot dog with that burger?
Yes, Burger King is preparing to sell classic hot dogs — with mustard, ketchup, relish and onions — and chili-cheese dogs at its 7,150 U.S. locations starting Feb. 23, Bloomberg reported.
It’s foodie synergy between the fast-food chain and Kraft Heinz Foods, both partly owned by Berkshire and its Brazilian investment partner, 3G Capital. The hot dog supplier, Oscar Mayer, also is managed by 3G.
Burger King’s North American president, Alex Macedo, said it’s the King’s biggest change since chicken sandwiches joined the menu in the 1970s.
“This is the most obvious product launch ever,” he said, since Heinz ketchup and mustard will adorn the new dogs. He expects Burger King to become the biggest seller of hot dogs in the world.
The Omaha World-Herald is owned by Berkshire Hathaway Inc.