Kraft to switch Cadbury jobs to Zurich
- 4 December 2010
- From the section UK
Cadbury's new owner Kraft Foods has confirmed plans to move part of the business to Switzerland in a move which could cut its UK tax bill.
By switching a few key roles to Zurich, the US food giant is expected to pay less corporation tax, depriving the exchequer of millions of pounds.
Kraft said most UK-based jobs would remain as it integrated the Birmingham chocolate firm into its European model.
The takeover earlier this year was one of the most controversial of a UK firm.
It raised issues about foreign ownership of UK assets and the job security of British workers.
UK corporation tax is levied at 28%, while rates at Kraft's European headquarters in Zurich begin at 15%.
But foreign holding companies using Zurich as a base can be exempt from tax on non-Swiss earnings and firms can also apply for "mixed company tax privilege" to agree lower rates.
A Kraft spokesman said: "Since 2006 we have been implementing our European model involving a (holding) company based in Zurich together with local companies in country markets.
"The reorganisation has given us greater focus on our priority brands and has helped us grow faster. We are integrating Cadbury into this model.
"This involves the transfer of certain roles to Switzerland, though the majority of UK-based roles will remain in the UK."
Kraft is expected to finalise the changes next year.
Cadbury was founded by Quakers almost 200 years ago with a renowned care for its workers.
Jennie Formby from the union Unite said legislation should be changed to prevent Kraft from making such a move.
She said the Cadbury "workforce is hurt by the massive cuts in public spending currently being inflicted on them by the coalition government. The last thing they need at the moment is for Kraft to add to the misery by depriving the exchequer of yet more millions".