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Cadbury plans fuel job concerns | Cadbury plans fuel job concerns |
(about 7 hours later) | |
Confectionery and drinks giant Cadbury Schweppes is to set out plans for a major overhaul of its business amid speculation of substantial job cuts. | |
It is to give details on Tuesday about plans to separate its chocolate and gum business from its US drinks operation, whose brands include Dr Pepper. | It is to give details on Tuesday about plans to separate its chocolate and gum business from its US drinks operation, whose brands include Dr Pepper. |
Options include the sale of the drinks business or its separate flotation. | Options include the sale of the drinks business or its separate flotation. |
Reports have also claimed Cadbury may lose up to 5,000 jobs in a cost-cutting move but it has not commented on this. | Reports have also claimed Cadbury may lose up to 5,000 jobs in a cost-cutting move but it has not commented on this. |
US focus | US focus |
The world's largest confectionary business, Cadbury employs 50,000 staff worldwide including 2,500 workers at its UK chocolate factory in Bournville near Birmingham. | The world's largest confectionary business, Cadbury employs 50,000 staff worldwide including 2,500 workers at its UK chocolate factory in Bournville near Birmingham. |
The firm has been under pressure since poor European sales and a costly salmonella scare in the UK - which led to a million chocolate bars being recalled - saw profits fall sharply last year. | The firm has been under pressure since poor European sales and a costly salmonella scare in the UK - which led to a million chocolate bars being recalled - saw profits fall sharply last year. |
CADBURY SCHWEPPES BRANDS Dairy Milk, Cream Eggs, Green and Black's, Trident Gum, Dr Pepper, 7-Up, Snapple | CADBURY SCHWEPPES BRANDS Dairy Milk, Cream Eggs, Green and Black's, Trident Gum, Dr Pepper, 7-Up, Snapple |
It has been evaluating its strategic options since March while stressing that a separation of the two businesses would better exploit their potential and increase returns to shareholders. | It has been evaluating its strategic options since March while stressing that a separation of the two businesses would better exploit their potential and increase returns to shareholders. |
Analysts believe the US drinks business could be a takeover target with a number of private equity firms and Nelson Peltz, who sold the Snapple drinks business to Cadbury in 2000, seen as possible buyers. | Analysts believe the US drinks business could be a takeover target with a number of private equity firms and Nelson Peltz, who sold the Snapple drinks business to Cadbury in 2000, seen as possible buyers. |
Mr Peltz bought a 3% stake in Cadbury earlier this year, sending its shares up sharply. | Mr Peltz bought a 3% stake in Cadbury earlier this year, sending its shares up sharply. |
'Panic' | 'Panic' |
Cadbury has reshaped its business in recent years, exiting less profitable sectors and focusing instead on core brands, particularly in the US and emerging markets. | Cadbury has reshaped its business in recent years, exiting less profitable sectors and focusing instead on core brands, particularly in the US and emerging markets. |
It sold its European soft drinks arm in 2004 and has bought businesses such as the Green and Black's chocolate firm designed to appeal to wealthier consumers. | It sold its European soft drinks arm in 2004 and has bought businesses such as the Green and Black's chocolate firm designed to appeal to wealthier consumers. |
Cadbury's Bournville factory is one of the most famous in the UK | Cadbury's Bournville factory is one of the most famous in the UK |
But despite successes in North America and Asia, overall growth has remained sluggish. | But despite successes in North America and Asia, overall growth has remained sluggish. |
Unions are concerned by media reports that the firm may be set to embark on a cost-cutting drive similar to that pursued in 1999, when 30 factories were shut. | Unions are concerned by media reports that the firm may be set to embark on a cost-cutting drive similar to that pursued in 1999, when 30 factories were shut. |
Cadbury currently operates 35 confectionary sites around the world as well as 59 bottling and manufacturing plants. | Cadbury currently operates 35 confectionary sites around the world as well as 59 bottling and manufacturing plants. |
Unions said the firm must be open about its plans with staff and not blindly in thrall to calls for improved performance from the City. | Unions said the firm must be open about its plans with staff and not blindly in thrall to calls for improved performance from the City. |
"This seems to have been done after activist investors have panicked the management into cutting jobs," Gary Smith, from the GMB union, said of reports of job cuts. | "This seems to have been done after activist investors have panicked the management into cutting jobs," Gary Smith, from the GMB union, said of reports of job cuts. |
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