Great grandson of Cadbury founder slams acceptance of Kraft bid
A descendant of the original Cadbury founder has slammed the historic Bournville firm’s shareholders who he claims have “surrendered” the chocolate-maker for the sake of short-term interests.
City of London corporate financier Peter Cadbury, who is a great grandson of the original Cadbury founder George Cadbury, described the board’s decision to back Kraft’s £11.6 billion takeover bid as “a very sad day”.
Mr Cadbury pointed the finger at the hedge funds holding Cadbury stock, which he described as “traders” rather than investors, and also hit out at some of the pension funds who he believed had taken an increasingly short-term attitude.
“It does seem terribly sad that a company that has been around for 186 years should have its future determined by people who take a very short term view – that is the part that I found the saddest,” he said.
“When my great grandfather and grandfather were chairmen, it was very much a partnership between long-term investors, loyalty from the employees and brands which had very high integrity.
“That is a culture that is bound to change.”
Mr Cadbury’s comments come after Kraft announced the backing of the Cadbury board for a revised 850p per share offer, ending months of public sparring between the two firms over a price for a deal.
Cadbury’s 2,500 workers at Bournville have been plunged into uncertainty by the move, despite Kraft giving assurances that the UK would be “a net beneficiary in the long-term as regards manufacturing jobs,” a statement which Birmingham MP Liam Byrne (Lab Hodge Hill), repeated.
Kraft has pledged investment in Cadbury’s site at Bournville but union representatives have raised concerns about the conglomerate’s £7 billion debt burden needed to finance the deal, which they believe will inevitably mean it needs to cut back on staff.
But Mr Byrne said it would not be possible to close or seriously scale back Cadbury’s Birmingham operations, because there were no other plants currently capable of producing chocolate on the same scale as Bournville.
The MP was speaking following high-level discussions with Todd Stitzer, Cadbury’s chief executive.
Doubters, however, have pointed out that similar assurances were given when Kraft took over Terry’s in 1993 - but still the firm subsequently transferred production to Eastern Europe.
Mr Byrne insisted: “Todd feels Cadbury’s Birmingham manufacturing base is the last place on earth Kraft would look for savings.
“Not only has Cadbury spent £300-400 million on Bournville in the last few years, but it’s physically impossible for anyone to make the amount of chocolate made in Bournville anywhere else in the world without spending hundreds of millions of pounds.
“That means Kraft could be a net importer of jobs.”
But many, including Peter Cadbury, who described himself as a “tiny shareholder” in Cadbury, are still wary about Kraft’s assurances.
