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Kraft, Cadbury and Keynsham : Enter the Pinstriped Policeman.

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Dave Harvey | 11:47 UK time, Monday, 8 March 2010

Keynsham's Chocolate Factory

Will it never end? Will Keynsham's chocolate saga never be laid to rest?

Today, people in this quiet north east Somerset town are all busy reading the Wall St Journal. Keynsham was quoted so often during the Kraft / Cadbury takeover war, you suspect some townspeople took out a subscription. Now, a month after the Americans abandoned their pledges to the town's famous chocolate factory, we read Kraft faces "a City probe".

The Takeover Panel has had a complaint that "employees and investors were misled" by the US firm in its hostile bid for Cadbury. So what's going on? And can it change anything?

Investors are rather baffled. "Sad as it may be about the Somerdale plant," says Ben Yearsley of investment analysts Hargreaves Lansdown, "it does seem strange that the takeover panel are investigating comments Kraft made about potentially keeping it open. Ultimately it would have cost shareholders more to keep the plant open, therefore shareholders haven't lost out by closing it."

He's right of course. When Kraft announced they were closing the factory after all, no investors complained. It was staff who felt gutted, but what concern is that of the City Regulator? How have they got involved?

Chocolate Wars

Like most stories in this battle, it starts with Amoree Radford, the feisty campaigner who's been fighting for two and a half years to keep Keynsham making Crunchies.
"I was out walking my dog," Amoree tells me, "when the phone rang. It was Jacob Rees-Mogg, asking me to countersign a complaint."

Mr Rees-Mogg is the Conservative candidate for the area at the next Parliamentary Election. He's also something of a city-slicker, an investment banker whose father, Lord Rees-Mogg, was Editor of The Times for 14 years and now chairs "The Zurich Club", described as 'a private, international network of trustworthy and knowledgeable investors and entrepreneurs'. You get the picture: connections.

Mr Rees-Mogg explained to Amoree that he had drafted a letter of complaint to the City regulator, itemising the broken promises made to staff at Somerdale. I've seen the letter, and here's the key line:

"The speed with which the closure was announced indicates that the stated intention to keep the factory open was either made without due care or was knowingly inaccurate."

Amoree Radford"We realise we can't get the jobs back," Amoree tells me ruefully, "but what else can we do? We just want them to learn their lessons for the future, so it doesn't happen to another company in the future."

You can't argue with that, can you? Yes, the die is cast. Yes, Kraft ain't changing its mind, and Keynsham is closing. But a rap over the knuckles from a pinstriped policeman can't harm can it?

"I think this is a distraction, and the town doesn't need it." There is a man arguing with it, and he's the town's Labour MP, Dan Norris. "It can't bring the jobs back, and worse than that, it will drag everyone back through the heartache they've already endured twice."

Mr Norris thinks Keynsham has had it with raised hopes. Being led up the chocolate coated garden path by Kraft execs was bad enough. Leave it there, he says. If nothing can be done, it's time to move on and create some new jobs to replace the old.

It's certainly true that the regulator has few teeth to bite Kraft's global chocolate empire. And already that Polish production line has started making mini eggs and 'Crunchskis', are they are now known round here. So is this latest investigation a weary waste of effort, or a reasonable attempt for a little financial justice?

Your call, as ever.

Update 17:15 Monday.
Jacob Rees-Mogg has just been on Ben Prater's show on BBC Radio Bristol. He told us that the "bowler hatted bobbie" does have teeth after all. Yes, just the reputation impact, but Cadbury / Kraft have such serious debts they will need the City, and therefore a good name. "A man's word should be his bond," Mr Rees-Mogg told us, "and Kraft's word turned out to be his bond for only a week."
Also, rather honestly I thought, he admitted he'd been caught out by their change of heart. He had originally believed the Kraft pledge, calling it proof that "capitalism can be a force for good". "I am rather embarassed to admit that I was taken in," he told us on the air.

Comments

  • Comment number 1.

    How is it that it is Kraft's fault that Cadbury did not tell them until the 11th hour of the takeover that matters were too far along to stop the closure of Keynsham and that the Polish plant was already up and running? This is just another headline grabbing attempt by Lord Mandelson to look like he is a friend of workers. In fact, he is an oligarch who much prefers the likes of Saif al-Islam Gaddafi and Lord Rothschild. Enough Nu-Labour lies!

  • Comment number 2.

    Well, well, Im not suprised Mr Norris is saying that Keynsham can do without any more upheaval..... very funny - IF Mr Norris had had the guts to slither off his fence from day and help the British people to keep THEIR productive, profitable chocolate factory HERE from day 1 maybe things would have been different. It is not only Kraft who have done 'U TURNS' (politely written), it is the wet guttless Government too! The British Government couldnt organise a Hen Party in a Chippendales Bedroom! It is up to the GREAT British public to cause a stink and tell Kraft AND the Government that enough is enough - stop saving banks and save OUR BRITISH MANUFACTURING! NO MORE IMPORTS of our British produce.

  • Comment number 3.

    How feasible would it be to organise a boycott of companies like Kraft who promise one thing and deliver another.Would the possibilities of this type of consequence also encourage shareholders to act with more responsibility?

  • Comment number 4.

    3. At 2:56pm on 08 Mar 2010, akinder wrote:

    It is indeed possible to boycott companies like this if you think they have acted unreasonably. But I think, apart from a few employees, no-one really cares. Yes, some people make some loud noises about how wrong it is, but at the end of the day most people have more to worry about.

    I, for one, don't see that Kraft has done anything wrong. If people wanted to keep the company British then they should have bought shares in the company. Then they could have voted against the takeover. All Kraft have done is buy a company that happens to be British. British investors invest overseas as well.

    In reality people may want Cadburys to remain British, but they don't want it enough to actually invest in the company or actually do anything about saving it.

    In any case, it's hardly a great company. How can a company that sells products that damage people's health be worth saving?

  • Comment number 5.

    Business, Innovation and Skills Committee Future Meetings
    Date and Time:
    Tuesday 16 March 2010 at 10.30am
    Location:
    To be confirmed
    Subject:
    Company takeovers, mergers and acquisitions
    Witnesses:
    At 10.30am - Unite the Union
    At 11.15am - Cadbury / Kraft

  • Comment number 6.

    Select Committee hearing on 16th March v Kraft is at Portcullis House, London

  • Comment number 7.

    Its no surprise at all that this happened, See Terry's , another company that kraft moved...too er Poland. Funny how the media did not even mention that, now its oohh look at the big bad Kraft, while the 'media men' rake in the cash from investing in the Cadburys company and live off there dividends and inflated share offers, whilst of course complaining about the fact that kraft are bad to sell more papers! ha

 

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