MP worried by lack of clarity on Cadbury jobs

The Business, Innovation and Skills select committee met today, with MPs pressing Kraft executives, including corporate and legal affairs director Marc Firestone, on the firm’s controversial £11.5bn deal to takeover Cadbury last January.

MPs were seeking reassurances from Kraft on issues such as honouring a commitment to keep Cadbury's UK-based research and development facilities, as well as pressing the firm to extend a pledge made last year to guarantee the future of 3,000 UK jobs over six Kraft sites until 2012.

But select committee member and Labour MP Ian Murray told FoodManufacture.co.uk that today's session had left MPs none the wiser: "Who knows but we might have a vibrant UK chocolate making business in the future, but unfortunately none of the executives were prepared (or even had the authority) to back ​[staffing] commitments beyond 2012, which is a bit of a worry."​

Rosenfeld's no show​

Murray said that today's session essentially comprised three sections, and began with a "robust discussion"​ about Kraft ceo Irene Rosenfeld's refusal to attend the hearing or even appear before the committee via videolink.

Rosenfeld angered MPs by refusing to appear before the select committee for a second time after her no-show last March. In addition to Firestone, Trevor Bond, president of markets, Kraft Europe and Kraft UK and Ireland president Nick Bunker attended instead.

Murray said that Rosenfeld's letter declining the invitation made it quite clear that she thought the select committee was hard on Kraft's panel last year, that there was little more to say, and that she didn't want the session to descend into what he described as a "personal knockabout".​

He added that he was disappointed by the fact that Rosenfeld made comments to the press "obviously directly from her" ​that assisted Kraft with the Cadbury takeover, but still wasn't personally prepared to explain Kraft's position to the select committee.

Secondly, the committee examined Kraft's "thought processes" ​following the takeover, Murray said, particularly relating to future UK staffing levels, where he said executives refused to extend an existing commitment beyond 2012, citing diminishing returns, raw material costs and volatile world markets; the third section dealt with pension issues.

Nonetheless, Murray said Kraft recognised that Cadbury does have two world-class innovation centres in Bournville (chocolate) and Banbury (coffee), and that the company had made it clear that when clear synergies were apparent with Kraft's brands on a global level, sites would remain.

Laying down the Cadbury law​

Ahead of today's session trade union Unite accused government ministers of “dragging their feet”​ over a so-called Cadbury law to protect British firms from undesirable foreign takeovers.

Unite national officer for food and drink, Jennie Formby, said: “Since last year’s takeover, the government has been very silent on the need for a Cadbury law which would protect viable British companies from predatory takeovers from financial institutions which have no real interest in the long-term welfare of the company, its employees and product development.​

Formby said the government needed such a law as part of a manufacturing policy to help redress the UK’s economic problems, but said: “Business secretary Vince Cable …now needs to prove he has a political future and enact a Cadbury law very quickly.​

Murray said he supported a Cadbury law in "some shape or form"​, but that he wanted it to be done properly, in a way that didn't affect the positive environment in the UK for mergers and acquisitions.

Unite was scathing about Rosenfeld's failure to attend: “The fact that … Irene Rosenfeld has refused to appear before the BIS select committee shows the arrogance of international capitalism and does not bode well for British companies fighting off greedy and speculative bids in future."​

She added that Unite also had “serious concerns”​ about Kraft’s refusal to give more than a two-year guarantee over further compulsory redundancies or site closures, after Kraft reneged (in February 2010) on an initial promise not to close Cadbury's Somerdale site if it succeeded in taking the firm over.