Hampton Creek, [maker] of mayonnaise, ranch dressing and other food products, has come under scrutiny by regulators for its business practices.
The Securities and Exchange Commission has opened a preliminary inquiry into Hampton Creek. . .
The S.E.C. inquiry is a response to . . . an organized effort by Hampton Creek to buy large quantities of its Just Mayo product . . . by sending undercover contractors into stores.
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. . . the product buyback effort. . . made Just Mayo seem more popular than it was, not long before Hampton Creek raised $90 million from venture capitalists and other private investors. . . .
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. . . .The company is believed to be losing significant amounts of money. . . .
. . . Hampton Creek. . . faces some basic challenges with the manufacturing costs for its products.
. . . in 2014 the company had negative gross margins of about 20 percent on Just Mayo. . .
The issue arises from Hampton Creek’s use of premium ingredients in its products without charging . . . eye-popping prices. . . The vegetable oil used in Just Mayo, for example, does not come from [GMO] sources, which adds significant cost. . .
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