Business World

Sunday 18 August 2019

Cadbury's owner may sell €1bn cheese arm

 

Philadelphia cheese has annual sales of about €1bn. Photo: David Paul Morris/Bloomberg
Philadelphia cheese has annual sales of about €1bn. Photo: David Paul Morris/Bloomberg
Donal O'Donovan

Donal O'Donovan

CADBURY owner Mondelez is reported to be considering a sale of its Philadelphia soft cheese arm and other dairy businesses in Europe, as it focuses on its faster-growing chocolate and biscuits brand.

Mondelez is a major buyer of Irish dairy – but overwhelmingly for use in confectionery rather than for cheese.

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The company has more than 900 employees at three Irish manufacturing sites in Coolock and Tallaght, in Dublin, and Rathmore, Co Kerry.

Earlier this month, it said it was seeking to cut 70 jobs at its Coolock production plant, as a result of automation.

The factory in Rathmore produces chocolate crumb and sources around 80 million litres of fresh milk a year from farmers in Munster.

The Coolock plant makes Cadbury brands including Flake, Boost, and Twirl.

The Tallaght site produces ingredients for chewing gum.

The UK’s ‘Sunday Telegraph’ newspaper reported yesterday that bankers and private equity firms are now running the slide rule over the Philadelphia business.

However, Mondelez said it has no plans to sell the business.

“We have no plans in this regard. Our Meals business is a high-quality business for us and provides strong margin and cash flow, as well as scale benefits in several markets.”

If a sale did happen, the cheese business alone has annual sales of around $1bn (€894m).

Potential buyers include Kraft Heinz, French dairy group Lactalis and Upfield – which was previously Unilever’s spreads division – as well as private equity firms.

A sale of Mondelez’s cheese brands in Europe would follow the disposal of its Middle East cheese business in December to Danish dairy giant Arla.

US-headquartered Mondelez hived off its grocery and cheese brands into a separate business in 2015, sparking speculation of a definitive break from the chocolate and biscuits units.

Irish Independent

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