The Sprout

A Dark Day For Chocolate

Posted by CLICportia from Cardiff - Published on 19/01/2010 at 06:13
6 comments » - Tagged as Food & Drink, Topical

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British chocolate and confectionery company Cadbury Plc’s, one of the most famous British brands, has been taken over by U.S food company Kraft Foods Inc in an £11.9b (yes billion) deal. The takeover comes after more than four months of resistance from Cadbury after Kraft raised its previous bid.

Cadbury is best known for its chocolate products, which include the beloved Dairy Milk brand, Cadbury Roses, Cadbury Crunchie and Cadbury Caramel. Dairy Milk alone had sales of nearly £850m last year.

Cadbury accepted defeat last night in its battle to stay independent sparking a row over the vulnerability of British industry.

Foreign Takeovers

The 186-year-old confectionery giant joins a list of British industrial names to have fallen to foreign takeovers in similar circumstances in recent years. More than 50 leading companies have gone, including BAA, Boots, Cazenove, Corus, ICI, Jaguar Land Rover, P&O, Pilkington and Scottish Power.

Until now Cadbury had fought a public campaign to preserve its independence, attracting support from Lord Mandelson, the Secretary of State for Business, Innovation & Skills, who warned Kraft to expect "huge opposition" from the government if it wanted to make a "fast buck" by buying Cadbury.

Unions Voice Concern

The takeover has caused concerns for Unions as Cadbury employs 6,000 people in the UK, around 45,000 people globally and many more indirectly.

Cadbury unions have warned that up to 30,000 jobs would be put at risk by the deal as Kraft would be weighed down by some £22bn in debt by the takeover. Kraft has a record of aggressive cost-cutting, and the union Unite said that between 2004 and 2008 it shed 19,000 jobs and closed 35 sites to help reduce its debt.

What’s The Big Deal?

It’s not normally that the British public works itself up into a frenzy over a corporate takeovers, I mean sure it’s always sad when people lose their jobs but in these doom and gloom days we scarcely bat an eyelid at companies going bust, a few thousand laid off here and there, stocks plummeting, what’s so special about Cadbury? Apparently you can have our banks and our car manufacturers but damn it don’t touch the chocolate!

The concern amongst chocolate lovers is that Kraft is in a lot of debt and this might affect their decisions relating to what products they will continue to sell. Whilst top-sellers such as Dairy Milk, Crunchie and Creme Egg will surely survive, what about the less well known but equally adored brands? The childhood memories sort of chocolate, such as Fry’s Chocolate Crème and the Curly Wurly?

Kraft are unlikely to give two hoots about our childhood memories and are likely to base decisions on profit, like pretty much all corporate entities. Thus these niche brands could face the chop if they don’t pull their weight sales wise. I mean Kraft already owns some international chocolate sellers, familiar at duty-free shops globally (and usually bought as a last minute panic gift); these include Toblerone, Daim and Milka. In the grand scheme of things Curly Wurly is not exactly the international businessman’s chocolate of choice.

“But we’ve only just got Wispas back!” you plead with abject horror. These are tough times and in these dark days of business I suspect there will be no room for sentimentality. I personally would start stockpiling the Double Decker bars.

A Brief History of Cadbury

1824 John Cadbury, the son of Richard Cadbury, opens his shop at 93 Bull Street, then a fashionable part of Birmingham. Apart from selling tea and coffee, John Cadbury sells hops, mustard and a new sideline — cocoa and drinking chocolate, which he prepares himself using a mortar and pestle.

1866 The Cadbury brothers introduce a new cocoa process to produce a much more palatable Cocoa Essence — the forerunner of the cocoa we know today. The plentiful supply of cocoa butter remaining after the cocoa was pressed makes it possible to produce a wide variety of new kinds of eating chocolate.

1897 Cadbury manufactures its first milk chocolate.

1905 Cadbury launch Dairy Milk onto the market — a new milk chocolate that contains far more milk than anything previously tasted.

1913 Dairy Milk becomes Cadbury's best-selling line.

1923 Cream filled eggs, the forerunner of Cadbury's Creme Egg, were introduced.

1928 Fruit and Nut introduced as a variation of Dairy Milk and Cadbury introduce the "glass and a half" advertising slogan.

1938 Cadbury Roses are launched.

1958 Picnic is launched.

1960s Chocolate Eclairs are launched by London confectioner James Pascall.

1974 Cadbury Eclairs are launched nationally in the UK.

1976 Cadbury Caramel is launched.

1979 The advertising idea of "say thank you with Cadbury Roses" is introduced.

1985 Cadbury Creme Egg launches the "How do you eat yours?" campaign.