Cadbury’s Take Over- A Krafty Deal?

A potent image from a 2009 Cadburys marketing campaign in South Africa has resurfaced in light of the Kraft takeover of the most wonderful of quintessential British brands, Cadbury. But what will the deal mean for Cadburys?

In the South African print advertisement, the Man Size Cadbury Lunch Bar is presented as shark bait- symbolic, perhaps, in light of recent announcements of Kraft’s successful bid at ownership of the organisation.

The deal is a sweet one for Cadbury’s chief executive, who will reportedly pocket both a significant amount plus shares worth £12m from the company’s £11.9bn sale in a deal that also hands fees of at least £250m to legions of City advisers.

But it’s not all silver lining- a very real cloud is now hanging above the company’s thousands of workers who now, it seems, face an uncertain fate as their jobs hang in the balance. The company is based in Uxbridge in Middlesex and employs 6,000 people in the UK, with the firm’s chairman declaring job cuts as “inevitable”. He has, however, added that he envisioned  Kraft both supporting and developing Cadbury’s UK production facilities.

The Cadburys board backed the £11.5bn bid from Kraft, with Prime Minister Gordon Brown reassuring an anxious workforce that the government was “determined” to ensure that Cadbury jobs were secure.

“We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure,” he said.

In particular it is workers unions who are concerned that the Kraft takeover- which is being funded by £7bn worth of debt- will mean an extreme cutting of running costs, which will include a mass of job losses.

Unite national officer Jennie Formby said the Cadbury workforce was shocked and angry at having been “sold out”. She added: “This is a leveraged bid and Kraft will eventually have to repay the debt, meaning a great deal of uncertainty for the workforce in the UK and Ireland.”

Cadbury’s heritage is a key feature of the brand- a cultural heritage which may very well get swallowed up  in the process of takeover and Kraft’s sheer size.  Now the world’s largest sweetmaker with sales of $50bn, Cadbury’s famous Bournville, Bassett’s Liquorice Allsorts and Green & Black’s  will join Kraft’s stable of brands that includes Philadelphia, Maxwell House and Ritz crackers.