Home / Advertisers / Are political ructions beginning to affect Kraft brands and Cadbury?

Are political ructions beginning to affect Kraft brands and Cadbury?

Which is a Kraft brand of course since the UK chocolate and gum makers was bought for £12bn just over a year ago.

Kraft CEO Irene Rosenfeld has, for the second time, refused to appear before a British Parliamentary committee to update the legislators on employment protection issues at Kraft’s British operation (the company closed down a plant in Bristol and moved production to Poland shortly after it bought Cadbury, even though it said it wouldn’t) and it’s ‘five year business plan.’

Now it’s easy to see why Ms Rosenfeld has no desire whatsoever to talk publicly about her five year business plan and it’s naive of the MPs to expect her to.

Instead she’s sending three upper level minions to the committee (poor devils) who won’t talk much about it either.

But these contretemps do affect brands these days especially, when a campaign on Facebook can rapidly undo the good work of decades of advertising and decent corporate behaviour.

Rosenfeld will be more concerned that growth at Kraft is slowing, including at Cadbury which was supposed to boost growth (and did in the early months), thereby justifying the high takeover price.

Cadbury’s problems seem to be centred on its chewing gum brands Trident and Dentyne which it acquired when it bought the US Adams company in 2002 (incidentally making it a world player and increasing the likelihood of a bigger company taking it over).

Sales of these have slowed in the post-recession US apparently and this, coupled with higher cocoa prices, means that Cadbury at the moment is not quite the mighty growth engine Kraft hoped for and expected.

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So the last thing Kraft needs in what is a tough time for all food companies is a wave of bad publicity about reneging on its promises, treating the countries it operates in arrogantly and (a further bone of contention) tax dodging as it locates the Cadbury business in its European HQ of Switzerland.

But when growth slows companies panic and start to try to slash costs wherever they can, especially when they’re carrying a mountain of debt after a big takeover.

One way or the other Kraft/Cadbury is set for a stormy year or so.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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