Thursday, January 21, 2010

Cable questions Government on Cadbury Takeover

I have to say I do love my chocolate. While I naturally prefer a very dark Lindt or Green and Black, I do love that unique sweet cocoa creaminesss of Cadbury's chocolate, whether it's covering fruit and nuts, honeycomb, caramel or encasing white and yellow fondant.

I was not chuffed to hear news of the company's takeover by US food giant Kraft. Not just because I'm concerned that the company that makes plastic cheese might turn my favourite sweets into plastic chocolate, but also because it's handing control of another British company, a national institution abroad and putting the jobs of 4500 workers on the line.

What is quite bizarre is that more than half of the £11.9 billion price that Kraft has offered is to borrowed from a consortium which includes the Royal Bank of Scotland. That's right, the bank that we own is financing the sale of one of our national treasures. Why should a state-owned bank finance a deal that is not in the best interess of the UK economy?

That's why Liberal Democrat Shadow Chancellor Vince Cable has raised this concern with the Government. I can't see them taking any action - after all, they've not used their control of the banks to stop them awarding their top staff obscene bonuses, or regulated the industry to stop the disaster of 2008 ever happening again. In short, the Government has been about as much use as a chocolate teapot.

Of course it's up to Cadbury's shareholders to decide whether to accept the Kraft offer. It would be great if they'd turn it down, but somehow I doubt they will and Kraft will be free to do what it likes with our favourite chocolate maker.


Jennie Rigg said...

Look on the bright side. If Kraft default on their loan, you can go into any newsagent you like, grab a handful of Bournville, and say you are seizing assets on behalf of shareholders in RBS.

Keith Legg said...

It's made even worse by the story in the Herald today which suggests that, at around about the same time as the Kraft deal was being put together, RBS was withdrawing a £30,000 overdraft from the British skiing organiasation, potentially threatening the participation of athletes in the Winter Olympics.

I know that it's probably two different arms of the bank, but I just have the impression that RBS still doesn't get it - they don't realise the implications of being a Government-owned bank, and are getting away with it because the Govt won't remind them of this.


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