It is unclear how deeply the New York pressure against trans fatty acids and hydrogenated oils is going to affect our dietary and investment landscape. Starbucks (NASDAQ: SBUX) sure jumped up in a hurry to change its ways and KFC a division of Yum Brands (NYSE:YUM), dropped its trans fat ingredients shortly after it was legally taken to task about them. How is this whole scenario going to affect Altria Group (NYSE:MO) and Kraft Foods (NYSE: KFT)? If investors who have money tied up with the providers and users of trans fatty oils aren't taking a hard look at their portfolios, well in my opinion, they had better.
I don't think this is going to be a situation taken lightly. As a matter of fact, I see a rather nasty avalanche on the horizon. How long do you think it's going to be before some poor 300-pound soul is going to team up with some sloppy lawyer who has more time than guts and the two of them class- action this thing in a manner similar to the tobacco debacle of the 80s? If you don't think it's going to happen, then I think you need to get out more often.
I imagine there have been some heated meetings in the board rooms of companies who manufacture and market that stabilized oily junk. What do you think they're going to do, keep making it and hope the noise will die down? That will be the game plan of the lame and blind among our corporate food leaders. I guarantee you the bright ones are making hydrogenated exit plans right now.
Does this signal a pitiful writhing death for trans fatty oils? Not if you have an imagination and a couple usable gonads to go with it. How about having someone develop a home-heating system that utilizes the stuff as fuel? It's safe, stable, biodegradable (outside the body), and it even smells good when it burns. Have you ever burned a potato chip? Hey man, that's for real BTUs!!! When you take the components of hydrogenated oils and separate them you have umm, hydrogen and oil. Do you see what I'm getting at?
So don't give up on hydrogenated oils completely, but guard yourself and your investment dollars with care. If your portfolio is laden with trans fats and your companies are exhibiting a wait-and-see attitude, you need to find out if they have alternate plans. If you think this new move to cut fats from your diet will be short lived or quiet, you could be in for more than one kind of heart attack.
The following definitions are courtesy of Answers.com:
Hydrogenated oil: Unsaturated liquid vegetable oil that has had hydrogen catalytically added so as to convert the oil to a hydrogen-saturated solid.
Trans fatty acid: An unsaturated fatty acid produced by the partial hydrogenation of vegetable oils and present in hardened vegetable oils, most margarines, commercial baked foods, and many fried foods. An excess of these fats in the diet is thought to raise the cholesterol level in the bloodstream.











Reader Comments (Page 1 of 1)
1-08-2007 @ 7:02PM
M. L. Butcher said...
Disclosure, I am a long time share-holder of MO. It has been a very good investment. As such, I was alarmed when I read your blog.
I checked several Kraft Foods items in my cupboard and, all were "Zero Trans Fats". It appears that Kraft has a hydrogenated oil exit plan that has already been implemented. We also checked several other food products on our shelves and all were "Trans Fat" free.
So, it all comes down to the consumer to check and READ the labels of the food you are buying and, only buy foods that are "Trans Fat" free and as healthy as can be. Eat more fresh foods and less processed foods. When you do buy processed, READ the label.
Its not what you do some of the time, its what you do MOST of the time.
Best Regards,
MLB
1-05-2007 @ 8:37PM
Gary E. Sattler said...
YES! That's exactly the response I was looking for!
Shop smart and invest smart. READ READ READ.
Cutting the fat can be easy, healthy and profitable. I just want people to check and learn what their companies are doing.
Thanks for commenting!
1-09-2007 @ 10:21AM
sonny martin said...
This blog on Kraft was written by a paranoid idiot.
1-09-2007 @ 1:10AM
Lisa said...
Kraft was on my to-buy-in-2007 list, right near the top. It toppled not because of trans fats, not because of any worries about obesity lawsuits, but because Altria is the major shareholder. Sure, Altria has proven to be a very profitable stock with a nice dividend, but I am so completely and utterly opposed to cigarette smoking that I won't buy Kraft until Altria sells.