Tuesday, 24 May 2011

MP's say Kraft acted 'irresponsibly' in Cadbury takeover

The American food company Kraft Foods acted "irresponsibly and unwisely" when it pledged not to close a factory during its £11.5bn takeover of Cadbury, a Parliamentary Committee has concluded. 

The Business Select Committee said that Kraft should not have said it would keep Cadbury's Somerdale factory open – only to renege on the pledge after the bid. "A company of Kraft's size and experience ought to have acted with better judgement," the MPs said. 

Irene Rosenfeld, the Kraft chief executive, declined to appear in front of the Business, Innovation and Skills on two separate occasions.  

Kraft came close to showing contempt for the House of Commons in refusing to put forward chief executive Irene Rosenfeld to answer questions about its acquisition of Cadbury, MPs said on Monday.

The report, Is Kraft working for Cadbury?, said the committee members were left frustrated when Kraft boss Irene Rosenfeld turned down repeated requests to be questioned.

In their report, which followed a grilling of Kraft directors a year on from the controversial deal, the MPs repeated their criticism of Irene Rosenfeld's failure to give evidence in person. The MPs said: "The manner of her repeated refusal to appear before a committee of Parliament demonstrates a regrettably dismissive attitude to a National Parliament." 

They said they were still concerned about Cadbury workers pay and conditions. "We expect Kraft to honour its earlier commitment on pay and conditions alongside and in addition to its further commitment not to make the current harmonisation exercise one with an objective of cost cutting," the report warned.

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