Kraft criticised for factory closure u-turn
US food giant, Kraft, has been criticised by a group of MPs today after the company pledged to keep open Cadbury’s Somerdale factory in Keynsham, but later decided to close the site following its takeover of the British confectioner.
Kraft, which made several hostile bids for Cadbury before shareholders finally agreed to a deal, initially said a takeover of Cadbury would secure UK jobs, while keeping open the Somerdale factory.
However, shortly after the £11.5 billion deal had been agreed, Kraft said the factory, near Bristol, would close with the loss of 400 jobs.
Last month, the US food giant was investigated by the City takeover panel about whether it made misleading comments at the time of its takeover of Cadbury.
When Kraft announced its bid for Cadbury last September, it said it believed it “should be in a position to continue to operate the Somerdale facility”.
This statement was reiterated in its offer document to Cadbury shareholders in November.
Today, however, the Business Select Committee said: “Kraft has left itself open to the charge that either it was incompetent in its approach to the Somerdale factory or that it used a ‘cynical ploy’ to improve its public image during its takeover of Cadbury.
“Its actions have undoubtedly damaged its UK reputation and has soured its relationship with Cadbury employees.”
The Business Select Committee also said Kraft was “irresponsible” and “unwise” in reversing its pledge to keep Cadbury’s Somerdale plant open.
The Committee is now urging Kraft to make no further compulsory redundancies and no addition plant closures in the UK over the next two years.
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