Eijeijei… This Is Your Food

When Chocolate Turns Bitter: Kraft Wants Cadbury

We all love some chocolate, don’t we? Maybe you live in one of the 33 countries where Dairy Milk, Britain’s favourite chocolate is sold (Cadbury, 2009). This Cadbury classic was created in 1905 and is successful ever since.

Cadbury, a British confectionery and beverage company, is quite successful in general. Especially in emerging markets such as Eastern Europe or Arabic Countries. In fact, it’s the largest confectionary manufactor in the world (Bloomberg, 2009). They make (some of the) chocolate we love to eat. (Cadbury, 2009)

So, whenever someone is successful, there will be people who want their piece of the cake, or as in this case the chocolate. This is where Kraft Foods comes into the picture.

Kraft is the second largest food and beverage company in the world, right after Nestlé SA (remember, the guys who sell those “healthy” Fitness Flakes). With profits of US$ 2.9 billion, one could argue that they already make some money (download their annual report). Naturally however, they want to make some more.
Kraft, being dominated by the US business, obviously has interest in Cadbury as the company is still growing especially in new markets like Eastern Europe. A merge would enable Kraft to profit from those markets as-well and would enhance the company’s global influence.

In September Cadbury rejected a £10.2bn proposal from the maker of Toblerone, Oreo biscuits and Dairylea. But Kraft will reportedly bypass the company’s board and appeal directly to shareholders (Sky News, 2009).
This means that the shareholders then individually decide if they sell their shares directly to the company.
By that, Kraft could acquire enough shares to take over Cadbury even without permission of the company board. We call that hostile takeover.

What would that mean for us, the consumers? Would Kraft as new owner keep our beloved products as they are? Would they try to make them more “American”? What happens to the British Cadbury workers? How many would lose their jobs? We don’t know yet. But the thought of it is bitter-sweet.

2 Comments so far
Leave a comment