(Reuters) – Warren Buffett said on Monday that his Berkshire Hathaway Inc overpaid in the 2015 merger that created Kraft Heinz Co, but he had no plans to flee the struggling packaged foods company.

Buffett spoke four days after Kraft Heinz said it had taken a $15.4 billion writedown for its Kraft and Oscar Mayer brands and other assets, slashed its dividend, and that the U.S. Securities and Exchange Commission was probing its accounting.

Kraft Heinz’s share price sank 27.5 percent on Friday, causing Berkshire to lose $4.3 billion on its stake. Berkshire owns 26.7 percent of Kraft Heinz. Shares rose 0.7 percent to $35.21 in early trade on Monday.

“I was wrong in a couple of ways on Kraft Heinz,” Buffett said on CNBC television. “We overpaid for Kraft.”

The comments were a rare admission of error by the 88-year-old billionaire on a major investment at his Omaha, Nebraska-based conglomerate.

Berkshire and Brazilian firm 3G Capital had teamed up in 2015 to combine the former Kraft Foods with their H.J. Heinz, and together own about half of the merged company.

Buffett also said he has “absolutely no intention” of adding to or subtracting from Berkshire’s stake, and that he would continue to do business with 3G and its co-founder Jorge Paulo Lemann, calling him “an absolutely outstanding human being.”

‘TOE TO TOE’

Kraft Heinz’s disclosure raised questions about 3G’s financial strategy for the company, whose brands include Jell-O, Kool-Aid and Philadelphia cream cheese, and whether it is out of step with consumers seeking healthier, fresher alternatives to processed food.

Buffett acknowledged the changes, but said greater pressure is coming from retailers such as Amazon.com Inc, Walmart Inc and Costco Wholesale Corp, including through the latter’s Kirkland brand.

Stronger brands can “go toe to toe with Walmart or Costco” but weaker brands “tend to lose out,” Buffett said. “The ability to price has changed, and that’s huge.”

Berkshire’s own $3 billion writedown related to Kraft Heinz contributed to a $25.39 billion fourth-quarter net loss for Omaha, Nebraska-based Berkshire.

“He monumentally overpaid for Kraft,” said Doug Kass, founder of the hedge fund Seabreeze Partners Management Inc. “Increasingly, the moats he initially saw in his investments have been damaged.”

Buffett said he learned about the SEC probe about seven to 10 days before it was announced.

Greg Abel, a Berkshire vice chairman widely considered a candidate to succeed Buffett as Berkshire’s chief executive officer, sits on Kraft Heinz’s board.

3G STRATEGY

The announcement also called into question 3G’s signature business model of zero-based budgeting, which requires managers to justify their expenses annually from scratch, rather than use last year as a guide or pursue cost savings on an ongoing basis.

Kraft Heinz’s belt-tightening resulted in more than $1.7 billion in annual savings, including the loss of thousands of jobs, mirroring 3G’s similar efforts at such companies as Anheuser-Busch InBev and Tim Hortons.

While the strategy has resulted in leaner companies, it could backfire if the companies lacked products that people want, or failed to spend enough to develop and market those products.

Buffett said he did not believe 3G underinvested in Kraft Heinz. Berkshire is not involved in day-to-day operations.