The sale of Pringles to US snack giant Diamond Foods has been cast into fresh doubt.
Procter & Gamble last year agreed to sell the global snack snack – which generates sales of around £150m in the UK alone – but completion was delayed as Diamond carried out an internal probe into payments made to walnut growers.
Diamond yesterday announced the investigation had identified “material weaknesses” in the company’s control over financial reporting, with its and that it would be replacing its chief executive and chief financial officer.
“After an extensive and thorough investigation, the audit committee concluded that the company’s internal controls were inadequate and that certain grower payments for the 2011 and 2010 crops were not accounted for in the correct periods,” said Diamond chairman Robert Zollars, who added that the company would restate its financial statements for 2010 and 2011.
P&G said it would re-evaluate the sale following Diamond’s announcement, adding that Pringles had attracted “considerable” interest from other parties.
“As we evaluate the right next steps, we will be guided by what is best for our shareholders and our employees,” said a spokeswoman. “In the meantime, we are focused on building and supporting the Pringles business and our employees.”