MPs publish report entitled "Is Kraft working for Cadbury?"
23 May 2011
The Business, Innovation and Skills Committee has today published its sixth Report of Session 2010–12, Is Kraft working for Cadbury? (HC 871), which considers undertakings given by Kraft to the Committee in the previous Parliament
Adrian Bailey, Chair of the Committee said:
"Cadbury is a significant manufacturer and employer in the UK and the Cadbury name retains a profound resonance with British consumers notwithstanding Kraft’s acquisition of the company in 2010.
12 months after Kraft appeared before our predecessor Committee and half way through Kraft's two-year undertakings to our predecessor Committee on manufacturing and job retention, we invited representatives of Kraft to give evidence on progress. We were concerned about a number of regrettable job losses at Cadbury headquarters in the months following the acquisition, and about transfer of management functions away from the UK.
Although some concerns remain, notably around pay harmonisation and transfer of strategic brand management to Zurich, our Committee was encouraged to hear of Kraft's recent recruitment into research at Cadbury and its investment in Cadbury manufacturing in this country. We particularly welcome the commitment to extending Kraft's international research activities at Bournville as well as the confirmation on the future of the Reading R&D facility. With 10 months left before the expiry of Kraft’s undertakings to our predecessor Committee, we trust that Kraft will now signal an extension of its commitment to Cadbury UK into the medium term through further sustained investment. We hope too that the synergy savings to be made from the takeover will be invested back for growth at Cadbury UK.
In May last year, the Takeover Panel criticised Kraft for its handling of the Somerdale factory closure announcement. That decision was a serious matter and one which alone would have merited the appearance before us of Kraft’s CEO, Irene Rosenfeld. It is disappointing that our repeated invitations to Ms Rosenfeld were all declined. We trust that Kraft will in future fully accept the Takeover Panel criticism and the particular responsibility that it brings to value the efforts of the superb Cadbury workforce, including in the current pay harmonisation process. Kraft must abide by its undertaking that that process will not be about cost cutting.
As we say in our report, Kraft invited us to judge them on their deeds, and we shall continue to do just that."
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