MPs express concern over Cadbury takeover

The Business, Innovation and Skills Select Committee have also heavily criticised the US food giant’s chief executive for her “regrettably dismissive attitude” in refusing to give evidence to the panel.

The report, Is Kraft working for Cadbury?, said the committee members were left frustrated when Irene Rosenfeld turned down repeated requests to appear either in person or by video-link to give assurances about future employment levels at the chocolate company, acquired by Kraft for £11.5bn in February 2010.

The committee also said Kraft had failed to accept criticism from the Takeover Panel following its U-turn on the closure of Cadbury’s Somerdale factory last year, which they initially indicated would remain open.

Kraft pledged at the time that no further manufacturing jobs would be cut for two years, after 400 lost their jobs in Somerdale.

Addressing Ms Rosenfeld’s refusal to attend the hearings, and Kraft’s “persistence in failing to acknowledge the Takeover Panel criticism”, the committee said: “That sorry episode overshadowed what could have been a positive discussion on the future of Cadbury under Kraft’s ownership.

“In its correspondence with the committee, Kraft in our view steered close to a contempt of the House. We trust that that will not be repeated.”

Kraft executive vice-president Marc Firestone had said told the committee that he and two other executives - Trevor Bond, president of markets, Kraft Foods Europe, and Nick Bunker, president of Kraft Foods, UK and Ireland - were best placed to deal with the questions.

The select committee’s ongoing concerns are about the transfer of marketing decisions to Kraft’s European headquarters in Zurich and the plan for pay harmonisation, which the committee stressed would have to take place with union involvement.

The committee said they were reassured however by Kraft’s promise to invest in Cadbury, adding that they were “encouraged” by continued investment in Bournville.

They also said they understood that no further jobs would be cut in the UK.

In the report, released today, they said: “Whilst Kraft did not extend its undertakings on jobs, the strong indication to us was that the extent of investment at Bournville and other sites would only make sense alongside retention of employment levels in the UK.

“We trust that our interpretation is correct. If it is not, we shall expect any change in the position to be made public by Kraft at the earliest opportunity.”

Their concluding remarks again made reference to Ms Rosenfeld’s absence from the hearing.

“Our overall conclusion, therefore, is that, while there remain some significant concerns about Kraft takeover of Cadbury, a number of positive signs may be beginning to emerge,” they said.

“Those positive messages would have been considerably more convincing if conveyed directly to bodies such as ourselves from the top of the organisation.

“As for the future, Kraft’s witnesses asked us to judge Kraft on its deeds. We shall.”