Comment: Cadbury takeover is a bitter pill

By Luke Jones

When I was younger the Cadbury chocolate factory in Bourneville was “the music makers and the dreamers of dreams”, with a fairytale place full of umpa lumpas with edible plants and flowers. Indeed, Roald Dahl, the writer of Charlie and the Chocolate Factory was once employed as a chocolate taster at the factory while still a schoolboy. Now the hostile takeover of Cadbury is set to destroy what its founder, John Cadbury, set out to do in 1824. Like everyone else I feel powerless, as our little sweet shop melts into a candy store.

Cadbury was all about stability, profitability, great future, national treasure. It was not about mass debt or insecurity. That’s what we wanted our Cadbury to carry on tasting like and so did the workers. The company employs around 6,200 workers in the UK and Ireland, and 40,000 other workers around the world. They are now worried for their futures, for Kraft will borrow heavily to pay for Cadbury and debt on such a scale could destabilise a great business and thousands of jobs are likely to go. In the past 10 years, the US giant has sacked 60,000 workers to pay for other companies it has swallowed.

The facts are that the politicians, both local and national, have little influence into whether Cadbury is sold or to whom it is sold. To my mind, their huffing and puffing is disingenuous; the prime ministers  blunt warnings to any potential buyers of Cadbury not to move jobs out of Britain is nothing but empty rhetoric. I have prayed that Cadbury remained a stand-alone, British-owned and operated company, but that decision was in the hand of the shareholders and one-one else. Let us remind ourselves that the main players are not the small investors or employee shareholders: but institutional shareholders who hold the trump cards.

Sadly in Britain we have lost our powers to intervene in these matters, partly because the EU dictates our fiscal policies. This might also explain why we lost other UK companies like MG Rover, LDV and HP Sauce, along with many others. The Government can offer loans, but not subsidies. Just as in the case of MG Rover, when the EU rules on state aid had restricted funding to a six-month period forcing Rover to sell to China. But in the case of HP Foods factory, around 125 jobs were lost in Aston, when a decision was taken, by its US  owners, Heinz, to move production to Holland. Now the Americans are back with a taste for our chocolate.

We can only watch from the sidelines as predetory companies make bids (and counter bids) and hope that we have a British-owned and managed company for much longer. Last night I was hoping that a last-ditch attempt by Cadbury chairman, Roger Carr, would work. He called the takeover as “pitiful” after annual profits are up 23% at £1billion. This morning it looks like the rallying a cry to investors  “don’t let Kraft steal your company with this derisory offer,” was too little too late.

Let us, then, not forget on this sad morning,that Cadbury was built on ethical foundations which all began with its founder, John Cadbury, a Quaker, who belived that it was possible to act as a principled capitalist. Cadbury believed that you could both turn a profit and do the right thing. These principles remain with human rights and ethical trading policies, also being part of Fairtrade where the move continues to build on Cadbury’s heritage with farmers in Ghana for over 100 years and the ongoing work of Cadbury’s groundbreaking Cadbury Cocoa Partnership (CCP) launched in 2008. But Cadbury’s chief executive states, “this is not necessarily the heritage of any competitors.”

All of this has a déjà vu feel about it, when in 1988 there were all sorts of promises made that York based Rowntree would not be taken over by Switzerland run Nestlé for around £2billion, which caused a public outcry that a company so quintessentially British might fall under foreign ownership.

So does this really mean the end for legendary chocolate makers Cadbury? Faced with this hostile takeover bid of around £10.2 billon, but the Bourneville-based manufactures rejecting the initial bid brought some hope. This morning that hope faded. I think I might try and console myself with a bar of Fruit and Nut.