MPs critical of Kraft over Cadbury takeover

MPs have severely criticised US food giant Kraft for the manner of its £11.5bn takeover of Cadbury and the reluctance by its chief executive to attend a series of parliamentary hearings.

The report, by the Business, Innovation and Skills Select Committee, was expected to be hostile toward the US company – and so it proved.

Many MPs are still fuming over Irene Rosenfeld’s double snubbing of the committee and for her company’s subsequent management of the Birmingham confectioner.

The MPs had wanted to bring Ms Rosenfeld to book for the U-turn Kraft made immediately following the takeover when it went back on its initial word to keep the Cadbury plant at Keynsham open.

Hundreds of workers lost their jobs when the plant, near Bristol, closed earlier this year and production switched to Poland.

The MPs wanted assurances that such a situation would not be repeated and that should further closures be warranted then a full consultation carried out.

Despite demands for her to attend the committee’s first hearing, Ms Rosenfeld declined and sent one of her senior vice presidents instead.

When clarification on a number of other points was needed, notably Kraft’s future plans for the confectioner, Ms Rosenfeld again declined to attend and sent subordinates instead.

The company’s acquisition of Cadbury was subsequently criticised by the Takeover Panel and the situation prompted calls for the Government to introduce a Cadbury Law, effectively banning such a situation from occurring again.

The US firm then failed to endear itself to the Treasury when it announced it would be registering the Cadbury business in Switzerland, thereby depriving the Exchequer of important taxes.

However, it improved its position with its announcement of investment in the Bournville factory and its decision to make the plant its global centre of excellence for chocolate development.

It also pledged no further job losses until March 2012 when the company’s position will be reviewed.

MPs said the investment in Bournville made little sense if the company was planning to shed further jobs.

Despite this, the Unite union said it remained concerned about the situation.

Jennie Formby, Unite’s national officer for the food and drink sector, said: “One year on from Kraft’s predatory purchase of Cadbury the workers are still none the wiser about the company’s commitments to its UK businesses.  

“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.

“Only guarantees on jobs and investment will prove that Kraft is in the UK for the long haul.”