Friday, August 27, 2010

Cadbury Schweppes.................... Beverages on Block

On June 19, 2007, Cadbury Schweppes, the world’s largest confectionery company and the makers of popular Dairy Milk chocolate,in a significant yet surprising development, announced its decision to separate its American confectionery and beverage businesses to concentrate more on it confectionery business. The move assumes significance as earlier, in March 2007, the confectionery major had stated that it would either sell or demerger its Americas Beverages, which owns brands such as Dr Pepper,7Up,Sunkist, Snapple, and Hawaiian Punch. However, executives at the London-headquartered firm stressed that it was not a surprise move as the confectionery giant-as stated by Ken Hanna, Cadbury Schweppes’ CFO – had “been working on the possible separation of beverage for at least a couple of years”. Such explanations in the media by some investors that the British giant might itself be up for sale. Some investors even speculated that Cadbury’s decision might have been influenced by the US activist investor, Nelson Pletz, who recently acquired close to 3% stake in the British major.

The transport and General Workers’ Union (T&G), which has some 2,000 of Cadbury’s 3,500 UK workforce as its members, has expressed concern about Pletz’s intentions.”Cadbury is iconic British brand and a very successful company which does not need the attention of Pletz”, said Brain Revell, T&G National Organizer for food and agriculture. He termed Pletz’s intervention in Heniz as “a ruthless pursuit of profit for share holder”.He added, “Cadbury, with its Quaker background, has been an enormous success for all its stakeholders and shareholders as well as its workforce.

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