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MINNEAPOLIS - In its quarterly report issued today, General Mills Inc. said SEC staff "believed that the company does not adequately disclose the practice of 'loading' at the end of fiscal quarters to help meet internal sales targets or the impact of such quarter-end 'loading' on current and future period results of operations," The Associated Press reports.
Minneapolis-based General Mills also said the SEC "believed that the company had misstated its policy on product returns." The SEC has issued a formal request for additional information for its investigation, the company said.
In the filing, General Mills defined "loading" as "the use of discounts or other promotional programs to encourage retailers and wholesalers to increase their purchases of company products."
Former General Mills manager Jeffrey Millard has said General Mills often ended quarters by shipping more products than usual so it could book the sales, sometimes paying retailers to take the larger shipments, according to the AP.
Neither General Mills nor the SEC have detailed the SEC investigation, although General Mills chairman Steve Sanger in February denied the kind of "loading" Millard alleged.
General Mills first disclosed the investigation in October. In February, it said it received a "Wells notice," a formal notice that the agency has made a preliminary decision to recommend civil action against the company. The notice also covers Sanger and c.f.o. James Lawrence.