New campaign against Cadbury takeover

Written By: Tribune web editor
Published: December 10, 2009 Last modified: December 10, 2009

by René Lavanchy

Unions and MPs are seeking to oppose American food giant Kraft’s hostile takeover of Cadbury as the confectioner prepares to respond to a formal bid.

The Unite union will next week launch a “Keep Cadbury Independent” campaign and write to shareholders, politicians and Business Secretary Lord Mandelson, arguing that a takeover would threaten jobs and the company’s future.

The West Midlands group of Labour MPs is meanwhile discussing how to oppose the move, with a junior member of the Government declaring that a takeover would not be in Cadbury’s best interests.

Unions have been concerned about possible job losses since Kraft last month announced it was bidding to buy Cadbury, which employs 6,200 staff in Britain and Ireland. Cadbury is expected to reject the purchase offer on Monday, but Kraft is likely to continue bidding.

A Unite spokesperson said there was “nothing in Kraft’s revised bid which persuades us this is a good deal. We’ll be setting out why independence for Cadbury is best for workers and stability”.

The union is fearful that a Kraft takeover would see the firm “swallowed up”, pointing to Kraft’s purchase of Terry’s in 1993 which led to the closure of its York factory and production transferring to Poland. They say that Kraft has shed 60,000 jobs in the past decade.

Jim Cunningham, Labour MP for Coventry South and an aide to health minister Mike O’Brien, is calling a meeting of the West Midlands MPs’ group next week to discuss the takeover. He told Tribune: “Kraft seem to have a reputation for asset stripping. When you asset strip, jobs go, which we find very concerning.”

Asked if takeover was in Cadbury’s interests, he said: “I don’t think it is and the unions don’t think it is either. We’ve got to sit and discuss with the unions how they want to take this forward.”

Previous parliamentary opposition to the Kraft bid has been weak. Lynne Jones, Labour MP for Birmingham Selly Oak where Cadbury’s Bournville plant is the largest employer, tabled an Early Day Motion opposing the sale, but it only attracted 36 signatures. She will meet Business Secretary Lord Mandelson next week.

The Department for Business, Innovation and Skills said last week that there were no grounds for the Government opposing the bid.

A Kraft spokesperson this week repeated the company’s promise to keep open Cadbury’s Somerdale plant, which the Cadbury board had planed to close, and invest in the Bournville site.