Kraft is 'truly sorry' for U-turn over closure of Cadbury's Somerdale plant
Wednesday 17 March 2010
The US food giant Kraft has said it is "truly sorry" for reneging on an earlier promise to keep open Cadbury's Somerdale factory just days after it acquired the Dairy Milk maker for £11.7bn in January.
The grovelling apology came from Marc Firestone, an executive vice-president at Kraft, at a grilling by MPs yesterday over the closure, although he promised that the maker of Oreo biscuits would not close any more UK factories for the next two years.
Irene Rosenfeld, the chief executive of Kraft, had snubbed the Commons Business Select Committee meeting, sending along three executives instead, including Mr Firestone, its VP of corporate and legal affairs.
During the takeover process Kraft vowed to keep the factory open, despite the fact that Cadbury had already set in motion the process to close the Somerdale facility, at Keynsham near Bristol, and shift production to Poland with the loss of about 400 jobs.
Jack Dromey, Unite's deputy general secretary, said that Kraft had been "utterly cynical to pretend it could reprieve the plant". He added: "Hopes were raised, hopes were dashed."
On behalf of Kraft, Mr Firestone said yesterday: "We are truly sorry about that, and I am personally sorry. I personally give you my apology for creating that uncertainty."
In a heated session with MPs, he claimed that after the takeover had been sealed in January, Kraft had days later found out that the equipment required for manufacturing at Somerdale had already been installed in Poland. "Tens of millions of dollars of new equipment were going into the factory during our takeover bid. We had no way of knowing," said Mr Firestone. But at least one MP laughed at his version of events and cried "nonsense".
Lindsay Hoyle, the Labour MP, said that Kraft's U-turn was "remote, smug and worst of all duplicitous".
This month, it emerged that official complaints had been made to the Takeover Panel about the comments made by Kraft concerning Somerdale.
Holding a Terry's Chocolate Orange in the air, Mr Hoyle said that Kraft had broken its promises over the Terry's factory in York. After acquiring Terry's in 1993, Kraft closed the factory.
Mr Hoyle said: "The Vikings came to York to pillage. Kraft went to York and did exactly the same thing. You pillaged and asset-stripped the company."
But Mr Firestone promised that Kraft would not close any more factories in the UK in the next two years, although he was unable to make any commitment beyond that. He added: "And not withstanding any plans that are already under way, there will be no further compulsory redundancies of manufacturing employees in the UK."
He added that it "intends" to keep Cadbury's Dairy Milk factory in Bournville, Birmingham, open.
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