Jerry Blackett: We should get to know Kraft
Jan 29 2010 By Jerry Blackett
Cadbury is a very successful business. Its future will be determined by its ongoing ability to produce products that we all want to buy and enjoy.
It needs to remain razor sharp to compete and it will do this by maintaining its £100 million R&D spend track-record. Staying ahead of customer trends (like its introduction of the Fair Trade Dairy Milk bar) will keep Cadbury as our chocolate supplier of choice here and in all the global markets it chooses to be. As will its determination to maintain and increase productivity levels.
This is a formula that has served Cadbury well. It is this success that has resulted in Kraft purchasing the company. Twelve months ago, Cadbury shares were worth about £4.90 each. Kraft has just paid £8.50. It is not surprising shareholders decided this was too good a price to miss.
The local reaction to the sale of Cadbury is understandable. We don’t know the new owners and we are fearful of what they might do with our company.
We should be as confident about Cadbury as I know the Cadbury team feels about themselves. We tried to keep Cadbury as an independent business but we have to accept that the company belongs to the shareholders. It is shareholders who put money into a business, risking losing it all if the business fails. Better to see capital flow across borders to where it can earn the best return than see countries put up “no entry” signs. We have more work to level this playing field, but let’s do this rather than risk tit-for-tat protectionism.
We need to welcome Kraft to the West Midlands team. We need to get to know them and see what we can do to help them settle in. Now is not a time for mourning Cadbury’s loss of independence. Our energies are better directed to helping create a climate in the region that will help Cadbury continue to compete. So let’s make sure we are building great skills base that will be the future Cadbury work force; that we are using the tax system to incentivise Cadbury to keep spending on R&D.
By making the West Midlands the best region in Europe to run a business, we stand the best chance of Kraft sticking with Cadbury and growing the business still further.
* Jerry Blackett is the chief executive of Birmingham Chamber of Commerce