MPs criticise Kraft over Cadbury takeover

LONDON - A committee of MPs has issued a critical report on Kraft's handling of the takeover of Cadbury and called on it to clarify its intentions in regard to jobs and research in the UK.

Cadbury: new owner Kraft comes under scrutiny by MPs
Cadbury: new owner Kraft comes under scrutiny by MPs

The food giant has been accused of acting "irresponsibly" in its u-turn over Cadbury's Somerdale plant after it decided to shut it with the loss of 400 jobs after originally indicating it would keep the plant.

MPs have now called for clarification over its strategy and transparency over potential job cuts.

A report from the Business, Innovation, and Skills Committee revealed MPs to be highly critical of the new US owner of Cadbury on several fronts. The criticisms span Kraft's handling of the takeover and its subsequent lack of transparency over its strategy.

In particular the committee picked on the "careful choice of words" of Kraft executive Marc Firestone when it questioned him about the takeover in March.

Kraft sent Firestone, executive vice president of corporate and legal affairs, in place of chief executive Irene Rosenfeld, to face the MPs.

The report, published today, said: "We note Kraft's commitment to maintain Cadbury's R&D facilities in the UK. We also note Mr Firestone's careful use of words and that there is no specific commitment to the current level of employment and world class skills in R&D at the centres of excellence at both Reading and Bournville.

"We invite Kraft to reflect on the reputational consequences for their company in the UK of not honouring the spirit of Mr Firstone's assurances and warm words. We ask the Government to invite Kraft to clarify its intentions and to put its response in the public domain."

MPs also picked up on Kraft's pledge to uphold Cadbury's commitment to Fairtrade.

In today's report it said: "We note the commitment by Kraft to continue Cadbury's support for the Cocoa Partnership and uphold Cadbury's undertaking to extend its use of Fairtrade. Any dilution of Cadbury's commitment would reflect very seriously on Kraft's reputation and integrity."

The MPs' call for further assurances comes as City regulators approach the final stage of an inquiry into whether Kraft's assurances over Somerdale breached the Takeover Code.

The Government has to respond to the MPs findings within two months.

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