Kraft ‘secrecy’ a threat to Cadbury future, union

By Ben Bouckley

- Last updated on GMT

Related tags: Irene rosenfeld

Cadbury Somerdale is being marketed for redevelopment
Cadbury Somerdale is being marketed for redevelopment
Unite the Union has warned that Kraft’s secrecy regarding its intentions for Cadbury workers is a threat to the security of their jobs.

The union was reacting to the publication of the Department of Business, Industry and Skills (BIS) select committee report this morning on Kraft’s conduct since its 2010 takeover of Cadbury, ‘Is Kraft working for Cadbury’.

The committee recommends that the UK urgently needs a new takeover regime, stressing that a repeat of Kraft’s takeover of Cadbury – where in February 2010 it reneged on a promise not to close the Somerdale site​ – must be avoided by ensuring that promises made during bidding are binding.

Binding promises

It also said that pre-takeover statements on keeping factories open for defined periods should be binding, while it expected any changes made by Kraft to UK employment levels (beyond its two-year guarantee) to be made public at the "earliest opportunity"​, although the committee reflected that continued investment at Bourneville and other UK sites "would only make sense alongside retention of employment levels in the UK".

Members also criticised Kraft ceo Irene Rosenfeld for her "repeated refusal to appear before a committee of Parliament"​, after she failed to appear in person for the hearing in mid-March,​which they said demonstrated a "regrettably dismissive attitude to a national parliament, an attitude which we trust Kraft will rapidly take action to shed".

Unite said it was so concerned by Kraft’s failure to disclose “basic information”​ since the takeover that it is seeking to use international agreements to ensure the firm informs the union about its UK plans, specifically those relating to the next five years.

Jennie Formby, Unite national officer for the food and drink sector said the UK government could not sit on the sidelines: "One year on from Kraft's predatory purchase of Cadbury the workers are still none the wiser about the company's committments to its UK businesses.”

UK jobs and investment

Calling for guarantees on UK jobs and investment, she added: “In fact, we now have less information about the company's current state and future intentions than before the takeover.

"Workers look at Kraft's horrendous multi-billion debt, consider its record in other countries where jobs have gone, plants have shut and wages have been cut, and rightly worry about what the future holds for them."

Formby said Unite welcomed the committee’s push for changes to the UK takeover regime and corporate law, which she said now offered workers no help and UK firms little protection against “predatory purchases”​.

"Worryingly, however, it seems that the government has lost the appetite for the Cadbury Law promised by Vince Cable - but it must not shy away from giving our remaining industrial base desperately need protection,"​ she said.

Queried about what Kraft thought of the report, and whether it had a response to Unite's allegations of an information blackout, a spokesman said: “The facts show that Kraft Foods has been an excellent steward of Cadbury. That is reflected in the report.”

The report itself concluded that Kraft had honoured "most of the spirit and letter"​ of previous undertakings to the committee, although it expressed concerns about upcoming pay harmonisation and the shift of marketing management to Zurich, which "does not sit entirely comfortably with the commitments to manage brands out of the UK".

Related topics: Legal, Confectionery

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