US food giant Kraft bought British institution Cadbury in a hostile takeover in January 2010 for $11Billion, following much public outcry and various campaigns to save it. Soon after the deal was struck much of the production was moved to Eastern Europe making 400 people redundant despite promises at the time to save British jobs. These actions (by the famed makers of plastic cheese and ‘what the Americans’ call chocolate) delivered a further blow for UK manufacturing and, dare I say, Britain’s economic heritage.
Now there are revelations that the recipe for a long held British favourite has changed forever. Yes, the humble Creme egg is losing it’s Dairy Milk shell in favour of plain old milk chocolate. There is perhaps a small mercy that the gloop in the middle (whatever that stuff is) is going to remain unchanged.
Of course in the grand scheme of things this small change to the choccy on an overly sweet treat is at best a minor betrayal by the current owners of Cadbury, especially given their history with the brand. However, the Cadbury story does need to serve as a warning of what can happen when a much loved British institution is taken into foreign hands. We cannot rely on those overseas business owners to have any real sympathy with their new employees or the brands place in our collective consciousness.
In the interest of balance, foreign ownership has proven to be beneficial for British brands. Take Tata’s takeover of Jaguar Landrover for instance. A company now employing more people in the UK than ever before and has gone from strength to strength under their control. That being said if other more convenient or economical options rise can we trust them to support Britain?
This post is not supposed to be a rant against foreign ownership of once mighty UK businesses, although it might come across as such. It is more a warning that if we do sell our brands to foreign owners we cannot then expect those owners to operate under the sale same duty of care for us. The profit and loss sheet is likely to lead decisions over community, heritage and tradition.
Ok, so there is a bit of a leap to suggest that the current Creme Egg-gate is symptomatic of UK brands falling into foreign hands but I would like to final word to be by a very talented lady that has summed up the thoughts of the nation in song….
So sad all round really :o( I am sharing this on my G plus accounts and to some ‘made in Britain’ supporters who i know will feel the same way!
If we are to reach The Kind Of beneficial Balance achieved with TATA, surely it makes sense for sales contracts to include specific conditions relating to employment & environmental guarantees as a matter of common decency & regard for fellow human beings? Is it being suggested that the former British owners are in a sense betraying their British roots? That being the case we shouldn’t trust our financial institutions-or even neighbours-as far as we can throw them! Human nature might well dictate that it is basically just ‘dog eat dog’.. That makes such people little more than animals in the end then (even animals are capable loyalty)?
Hi Terry, Are you suggesting that we do/should trust our financial institutions?
I am not suggesting any sort of treasonous activity but would like to see more ‘people over profit’ decisions being made in the UK and abroad. John Elliot of Ebac is a shinning example of this. He gave his business to his employees last year ensuring jobs in that community for posterity. I wish there were more like him.
I would love to see John Elliot advising the government on ways of making it as easy as possible for others to emulate what he has done. As posted below it is the best business model for securing the long term health of our economy.
Hi Mike – I agree… although, as we have found out, getting government to listen to anyone is pretty difficult.
I think this is a point well made, when you sell to foreign ownership you loose control, you simply cannot predict the long term outcome or bring any influence to bare on it. The real root cause is of course a lack of the same level of belief in buying and keeping things British that we have. How a British businessman on a board of directors can vote for a foreign takeovers is frankly beyond my understanding, but at the end of the day corporate governance in this country gives them them a great excuse. For a public company, shareholder value is pretty well the be all and all, so a big fat juicy offer always win the day. To change this will take a great deal of effort, fighting many entrenched and vested interests. Of course it could and should be done for the long term health of our country. Our best recourse here is of course the power of the consumer, sometimes it works, in Cadburys case sadly it did not. The best answer for me though is in the long term to change the very nature of British business by having far more companies in employee ownership. This would build in stability and planning for the long term not to mention inherent British ownership. These businesses are invariably more successfull and again from the consumer point of view are great to support.
I have often wondered why our politicians seem to favour foreign investment in the UK (creating/saving jobs but taking the profits out of the country) over our investing in other countries (letting them do the work and sending profits back here so we can put our feet up).
Hi James
Thanks for highlighting the point about the recipe – something I hadn’t picked up on. I think the main point you’re making is about British ownership, something you (and I) feel strongly about.
However, when we’re talking about PLCs with shareholders then it becomes all about returns on the investment. Some of those shareholders will be our pension companies who rely on increased returns to fund pensions. if the company cannot make a profit (because the cost of paying workers a decent wage with decent working conditions) and has the choice of either going bust or moving manufacture abroad, then it will choose the latter. Have you ever noticed that every time a PLC fires staff or relocates abroad then the price of shares goes up?
Even a privately owned company will be faced with similar problems. Mike makes a good point about employee ownership (the John Lewis model) which could make a big impact. I recently had discussions with one of the companies listed on Kimwetu.com who will be moving their manufacture abroad because the manufacturing costs here, means that their products will be too expensive for us to continue buying.
So, the biggest impact to be made is by us, the consumer. We make the demand for products. If we continue to buy cheaper goods regardless of their provenance then we are the instruments of our own manufacturing demise. We all need to take a leaf out of your book and buy more UK-made goods. We are almost spoilt for choice although most don’t realise it (almost 3000 companies listed on Kimwetu.com!). This will mean that we might have to save more and buy less but it is the only way to make a difference.
Dom
It’s all about money and there is no sympathy in business and you just grab what you want to make a quick buck. We are now ruled by corporation democracy which leaves the public defenceless from decisions made by MPs and top business people to line their own pockets first.
I’m trying really hard to make sure Bonbonco.com remains very British and delicious. Custom build online. Fine Chocolate Tree kits for all the family.
Bonbonco.com #bonbonco
While we have lost some of our major heritage confectionery brands there are others still flying the flag for team GB. We wish you the very best!