MP’s criticise Kraft’s behaviour in Cadbury takeover

US food company acted “irresponsibly and unwisely,” says report.

Kraft, which pledged to keep the Somerdale plant of the British chocolate manufacturer open, has "undoubtedly damaged its UK reputation," the report by the Business Innovation and Skills Committee said. Kraft made the pledge during its takeover of Cadbury earlier this year, but later said the plant in Keynsham would be closed with a loss of 400 jobs.

The report, titled Mergers, Takeovers and Acquisitions: the takeover of Cadbury by Kraft, said, "We conclude that Kraft acted both irresponsibly and unwisely in making its original statement. By doing so, Kraft has left itself open to the charge that either it was incompetent in its approach to the Somerdale factory or that it used a 'cynical ploy' to improve its public image during its takeover of Cadbury."

The report also expressed disappointment that Kraft's chief executive Irene Rosenfeld had not appeared in person to meet Cadburys workers and discuss the company's future in a meeting with MPs held last month, saying a presence "would have given an appropriate signal of Kraft's commitment" to its Cadbury operations in the UK. Instead Marc Firestone, Kraft's executive vice-president for corporate and legal affairs, represented the company and apologised for what had happened.

Peter Luff, who chaired the committee, said that the issue has "rightly opened a debate on how takeovers in the UK are conducted". Jack Dromey, deputy general secretary of the union Unite, has repeated calls for a "Cadbury law" banning hostile takeovers of successful British companies by overseas multinationals.

 

 

 

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