When Cargill bought Joe White Malting, it won Australia's largest producer of barley malt, an anchor ingredient in beer.
But after the deal, Cargill claims it discovered that under Joe White's previous owner, Vittera, the maltster had routinely -- and surreptitiously -- supplied malt to customers that fell short of contractual requirements.
So, Minnetonka-based Cargill recently sued Vittera, which is a subsidiary of global commodities giant Glencore International. Glencore scooped up Canada-based Viterra in 2012. Cargill, a major producer of barley malt worldwide, bought Joe White in 2013.
In the suit filed in Australia, Cargill says that after the deal, it was told by Joe White executives about practices that led to customers getting malt that didn't meet their specifications.
One former Joe White manager informed Viterra that he and others had "ethical concerns" specifically about misstating to customers the results of malt testing, Cargill says in the suit.
Cargill, which reportedly paid about $370 million for Joe White, claims it has sustained yet-to-be determined financial losses due to the alleged actions at the malt company.
Joe White has suffered lost production, and is capable of producing only about 60 percent – or less – of volumes within customer specifications, Cargill claims.
In the suit, Cargill says it may be able to offset some of its losses at Joe White by investing $30 million – "a significant capital expenditure" – in order to properly blend malt to customer specifications.
