(Bloomberg) — Kraft Heinz Co. (NYSE:KHC), which counts Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) as its largest shareholder, is pushing some of its retirees to a private health exchange program operated by Towers Watson & Company (NYSE:TW) as the company cuts expenses.
The foodmaker is eliminating some benefits as it seeks to provide care in “the most cost-effective manner,” according to a letter to retirees and their spouses dated Sept. 1, a copy of which was obtained by Bloomberg.
3G Capital, which combined H.J. Heinz and Kraft Foods Group Inc. with Buffett’s backing, has been cutting jobs and office expenses to boost profits. As of Jan. 1, Kraft Heinz will offer medical and prescription coverage through the Towers Watson OneExchange program for retirees ages 65 and older.
“As a result, the existing company retiree medical and prescription drug coverage designs will not be offered after December 31,” according to the letter.
Michael Mullen, a spokesman for Kraft Heinz, said that the change applies to 15,000 Medicare-eligible retirees.
“These retirees will have a selection of health plans that provide equal or better benefits than our group coverage at a similar or even lower cost,” Mullen said in an e-mailed statement.