Saturday 29 April 2017

Cadbury warns chocolate bars could get smaller after Brexit

Creme Egg
Creme Egg

Niamh McIntyre

Cadbury will consider shrinking the size of its products or raising its prices after Brexit, the company has said.

The firm's UK boss said Britain would remain its “home of chocolate manufacturing”, with its factory in Bournville, Birmingham, to continue as its global chocolate research and development hub.

Glenn Caton, told The Guardian: “The UK is still going to be a huge market”.

However, he said Cadbury would follow other food manufacturers in using an industry tactic known as “shrinkflation” to offset the cost of Brexit.

This often involves cutting the size of a product while the prices increase or remain the same, meaning consumers pay more for less.

“All we can do is to move to the times that we face," he said.

"I am confident though because a £200m (€230m) investment in the last five years is not something we are going to walk away from. I can’t guarantee anything forever but am I confident that we are still going to have world-class manufacturing and research sites in the UK for the long term? I do feel confident of that."

Cadbury’s parent company, Mondelēz, sparked outrage when it recently reduced the size of its Toblerone bars, increasing the gaps between the triangular chunks while the price did not change.

Since the referendum, a pack of Cadbury Creme Eggs has also shrunk from six eggs to five, with only a slight decrease in the price.

While the size of Freddo chocolate bars have stayed the same, their price has increased by 20pc.

Other products subject to “shrinkflation” include cartons of Tropicana juice, Maltesers, and bottles of Bulmers fruit ciders.

While he strongly signalled Cadbury’s commitment to the UK, Mr Caton also said the company was concerned about the future of its EU national employees.

“We have 50-odd different nationalities in our research and development centre in Bournville.”

“We want EU nationals who are working here and living here to have the security that they can continue to do so.”

Mondelēz International, a division of the US giant Kraft, bought Cadbury for £12 billion (€13.85bn) in 2010.

The company paid no corporation tax in the UK in 2014 and 2015, the last years for which figures are available.

In the interview, Mr Caton defended these tax arrangements, saying: “We do pay, as a company, billions of dollars in tax on a global basis.”

Independent News Service

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