MPs to criticise Kraft over Cadbury takeover

US FOOD giant Kraft was expected to be heavily criticised in a report by MPs today for the way it handled the takeover of confectionary maker Cadbury.

The Business Select Committee report follows a series of hearings in which senior executives from the US firm were quizzed by MPs over the controversial acquisition.

MPs and unions leaders were especially critical of the company for its decision to close the Cadbury plant at Keynsham, near Bristol, after it initially indicated it would keep the factory open.

Just days after completing the £11.5bn takeover, Kraft announced its about-face, dashing the hopes of hundreds of workers.

In defence of its decision, Kraft claimed that the plans instigated by Cadbury management to close the factory and transfer production to Poland were just too advanced to reverse.

It claimed the exact position only became clear once the takeover had been completed because due to the hostile nature of the deal, no advance information had been available.

However, the report is expected to say that Kraft acted irresponsibly in making its announcement before all the facts were clear.

There is speculation the report may also accuse Kraft of announcing the retention of the Somerdale factory in order to boost its public image in the wake of the takeover of the much-loved British brand.

Whatever the outcome, Kraft’s reputation is thought to have sustained damage in the eyes of UK consumers, while workers in Bournville are keeping one eye over their shoulders despite assurances their jobs are safe for at least the next two years.

There is also speculation that the report may lead to calls for the introduction of a ‘Cadbury Law’ which would protect major British companies from being the subject of future hostile takeovers.

Although Kraft may now have to invest significantly in restoring its reputation there is currently little sign of any charm offensive, and it may be that the company adopts a low profile until the storm blows over.