MPs attack 'arrogant' Kraft over its refusal to discuss Cadbury
Tuesday 24 May 2011
The American food manufacturer Kraft saw its reputation in Britain sink still lower yesterday, as its management of Cadbury was roundly criticised as "arrogant" by MPs, business analysts and union officials.
A select committee report into Kraft's handling of the British chocolate maker, which it bought in February last year, accused the company of flirting with "contempt" of parliament for its repeated refusal to put its CEO, Irene Rosenfeld, forward for questioning.
The businesswoman turned down three separate requests to appear before the Business, Innovation and Skills Committee in March, as MPs sought reassurances that promises to protect jobs and investment at Cadbury would be maintained.
The company opted to send its executive vice-president and two regional presidents instead, saying that "the repeated demands for Ms Rosenfeld to appear in person are regrettable". The committe lamented this yesterday as showing a "dismissive attitude to a national parliament," with one member, Conservative MP Brian Binley, calling Ms Rosenfeld's personal ethics "deplorable".
He said: "I don't know how Kraft behave in America, but if this is a sample of it then I find it just totally unacceptable and it is a lesson to other companies under hostile bids."
Kraft has had consistently negative publicity in the UK following its £11.6bn purchase of Cadbury, mainly due to its decision to close the Somerdale factory near Bristol a week after taking over the business, despite promising during the bidding process that it would remain open. It subsequently offered a two-year guarantee for jobs at the famous Bourneville factory, but has so far declined to extend the offer. Adrian Bailey, the Labour MP who chairs the committee, said it was unfortunate that discussion of the increasingly frosty relationship between parliament and the US firm overshadowed the report's positive aspects.
"They actually do appear to be living up to their commitments, and you would think they would want to come along and proclaim that from the rooftops," he said. "Instead they are taking this surly attitude of saying: 'This is all too trivial for the chief executive, I'll send my underlings along to deal with it'. It's just not acceptable.
"I can't speculate about the motives of Irene Rosenfeld, but I can say that if she is employing public relations advisers – and I think she is – then quite frankly she should sack them."
Kraft issued a one-line statement in response to the report, which read: "The facts show that Kraft has been an excellent steward of Cadbury."
Unite, the union that represents Cadbury workers, is also unimpressed. Jennie Formby, Unite's national officer for the food and drink sector, said: "One year on from Kraft's predatory purchase of Cadbury, the workers are still none the wiser about the company's commitments to its UK businesses. In fact, we now have less information about the company's current state and future intentions than before the takeover.
"Workers look at Kraft's horrendous multibillion debt, consider its record in other countries where jobs have gone, plants have shut and wages have been cut, and rightly worry about what the future holds for them. Only guarantees on jobs and investment will prove that Kraft is in the UK for the long haul."
Jeremy Batstone-Carr, a business analyst for Charles Stanley stockbrokers, said the lack of time that Rosenfeld had spent in the UK since the Cadbury takeover was "grist to the mill of those who believed that perhaps Cadbury was sold up the river by Kraft."
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