Mondelēz hits back at critics in UK tax row

By Michael Stones contact

- Last updated on GMT

Not so sweet: Claim and counter claim surround Mondelēz's UK tax payments
Not so sweet: Claim and counter claim surround Mondelēz's UK tax payments

Related tags: Tax, Uk

Mondelēz International has hit back at critics who argued the global food giant avoided meeting its UK tax liabilities last year, after it was revealed the business paid no corporation tax in 2014.

Unite regional officer Joe Clarke said: “The case for Chancellor George Osborne closing the net on corporate tax avoidance is further reinforced with reports that Cadbury’s owner, Mondelēz International did not pay UK corporation tax last year.”

The union slammed “nifty footwork by clever accountants”​, which  meant the treasury was allegedly denied millions of pounds in corporation tax. “That​ [money] could have been spent on the NHS​ [National Health Service] and other much-needed public services,”​ Clarke added.

Unite's claims followed an investigation in the Sunday Times​ which revealed the business had not paid UK corporation tax last year.

‘We comply with all applicable tax legislation’

But a Mondelēz spokeswoman said the business had done nothing wrong. “In common with all global businesses, we pay corporation tax based on the laws of the countries in which we operate. We comply with all applicable tax legislation in the UK, and on a global basis we pay hundreds of millions of dollars in corporate income tax annually.”

Since 2010 Mondelēz had invested over £200M into both UK-based manufacturing and research and development, supporting 4,500 UK employees, she added.  “Importantly, independent academic research has also shown that, as a business, we are worth over £1.06bn to the wider UK economy, illustrating our impact reaches far beyond the factory gates.”

Unite claimed once again the chancellor was “turning a blind eye to the accounting machinations of big powerful multi-nationals”.​ But at the same time he was “turning the screw on those struggling financially in the form of welfare cuts” ​that may have been postponed for now.

‘Feasting on dividend payments’

“The case for a closing the net on the legal means for corporate tax avoidance is further reinforced by the Mondelēz revelations,”​ said the union, after Cadbury UK made profits of £96.5M in 2014. “While the exchequer is denied its due from Mondelēz, shareholders are feasting on dividend payments of £1.3bn.”

Mondelēz figures in focus

  • £0.0: UK corporation tax paid
  • £1.86bn: contribution to UK economy

Meanwhile, Mondelēz highlighted the scale of its UK investment, with £18M spent on its Global Science Centre in Reading and world-class research and development site in Bournville. The firm’s recent  £75M investment into four modern new lines in Bournville will secure the next generation of manufacturing at the site which makes more than 5M Cadbury Dairy Milk bars a day, said the firm.

“Independent academic research found that for every £1 spent by Mondelēz International in the UK, a further £1.42 is generated in the wider UK economy.  This makes Mondelēz worth over £1.06bn to the UK economy and in the 2013/14 financial year, our total contribution was £1.86bn,”​ said the company.

What they say about the tax row

Mondelēz:​ “These results ​[£1.86bn generated for UK economy] highlight the significant contribution that businesses such as Mondelēz International make to the UK economy, both through direct spending on employees and suppliers, and through the recirculation of that expenditure in the wider economy. As a contributor to the UK economy, we are committed to investing in the UK as a strategic hub for our people and our business for the future.”

Unite the union​: “The case for a closing the net on the legal means for corporate tax avoidance is further reinforced by the Mondelēz revelations. While the exchequer is denied its due from Mondelēz, shareholders are feasting on dividend payments of £1.3bn.”

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