UK’s largest union outlines fears of Kraft-Cadbury deal

Posted by James Ferre on 1st December 2009

Unite, the leading union in the food industry, overnight advised that it is growing increasingly concerned that US-based manufacturer Kraft will pay for its bid for Cadbury with extensive job losses in the UK and Ireland.

The fears are set out in a letter to Kraft’s chief executive, Irene Rosenfeld, and follow a recent meeting between the union and the company.

With analysts predicting that Kraft will be seeking to generate up to $1 billion in savings through mass redundancies and restructuring, Unite says Kraft must give commitments on a set of minimum employment protections, including no compulsory redundancies and protections for the workers’ terms and pensions. The union is also pushing Kraft to be more explicit about its intentions towards the Somerdale site, which is set to close early in 2010, as it fears that the absence of clarity is allowing mis-placed hopes to build that Kraft’s takeover would save jobs at the site.

Writing to Irene Rosenfled, Jennie Formby, the union’s national officer for the food sector, says: “Cadbury is a successful, profitable company that provides high quality jobs for over 6,000 employees in the UK and Ireland, and to date nothing has been said by Kraft to allay the concerns that we have about the potential threat to jobs and conditions should a takeover bid be successful.”

“While Kraft representatives expressed a willingness to engage in discussion and to try to allay the fears of our members in Cadbury, they stated that they were unable to give any guarantees either about jobs or conditions, or about the future of Somerdale, as Kraft is unable to get sufficient information from Cadbury as a result of the status of the bid as hostile.

“I have to say that I can not accept this; you clearly have enough information to persuade you to make a bid worth £10 billion and, as we pointed out in the meeting, in the context of the overall bid the assurances we are seeking are not a major commitment on the part of Kraft.

“Our major concern is to understand how you would achieve the quoted savings of $625million (which some analysts believe will need to rise to as much as £1.5billion) without significant restructuring involving the loss of jobs and sites.”

The union says it will continue to engage in discussion with Kraft and any other company who may mount a bid, and is shortly to launch its Keep Cadbury Independent campaign to win security in any takeover for workers in the UK and Ireland.