Berkshire Hathaway CEO Warren Buffett has said that the consumer goods industry is “still a terrific business” to be in, adding that 3G Capital, which helped to orchestrate the merger of Kraft and Heinz in 2015, is working hard to cut unnecessary costs out of the business.
"The 3G people have gone into certain situations where there were probably […] a lot of expenses that were not delivering a dollar of value for a dollar expended,” Buffett told Berkshire Hathaway’s annual general meeting in Omaha, Nebraska.
“They made changes very fast to a situation that probably shouldn't have existed in the first place.”
Question Time
At the meeting, which took place at the weekend, Buffett, alongside vice chairman Charlie Munger, answered five hours of questions from journalists on topics ranging from Geico insurance to Ginsu knives.
On the Kraft Heinz business, he added, "Our managers have different techniques of keeping track of trying to maximise customer satisfaction at the same time that they don't incur other than necessary costs.
"Consumer packaged goods are still a terrific business."
Trade Tariffs
Buffett and Munger also answered questions on President Donald Trump’s proposed tariff plans, as well as the escalating threat of a trade war between the US and China.
“I don't think either (the U.S. or China) will dig themselves into something that precipitates and continues any real trade war,” Buffett said.
“The benefits of trade are basically not visible. No one thinks about benefits day by day. […] The negatives, and there are negatives, are very apparent and very painful."
On the same topic, Munger added, "The conditions in steel were almost unbelievably adverse to the American steel industry. Even Donald Trump can be right on some of this stuff."
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
