Why the Cadbury’s buyout is bad news

The proposed £11.5 billion buyout of Cadbury’s by American food giant Kraft is provoking a nationwide response.  A lot of the reaction – including my own! – is probably due to our lifelong addiction to chocolate which Cadbury’s represents! People are outraged precisely because Cadbury’s is such a well-loved brand.

But the buyout of Cadbury’s is yet more bad news for British industry. National union Unite are ‘extremely concerned’ especially since Kraft has borrowed £7 billion to fund the takeover – that thousands of people are likely to lose their jobs, and sites get closed, as Kraft has done elsewhere. Much of Cadbury’s could be asset-stripped and sold off. (1)

But Greens have a dilemma. The dilemma is related firstly to what Cadbury’s has been involved in all its life and, then, with what it’s a victim of now.  We don’t particularly want to fight Cadbury’s corner – but note that the Government doesn’t want to fight for them at all! – Nor for almost an other company that’s been bought out by overseas interests, with only a few exceptions.

The problem with Cadbury’s is that only a fraction of its chocolate is fairtrade.  Global cocoa is hugely exploitative – even to the extent of child slavery.  Cocoa produced is then sold on the world market to whichever manufacturer.

But, of course, none of those *primary* (ie, moral and human rights) issues are going to be solved by Kraft’s buyout!

In addition, transnational corporations (TNCs) and so-called ‘world trade agreements’ effectively prevent producer nations from processing it themselves, so keeping them poor.

But surely, Greens say, the principle is valuable that any nation – and maybe even a locality, like Hull, or a region like Yorkshire – should be able and seek to protect its companies from buyouts by mega-corporations, especially those which are likely to asset-strip, sell-off and create mass unemployment?

Greens seriously disagree with global trade agreements –  whether it’s the lack of rights foreign workers suffer to produce our chocolate –  or whether it’s smaller, local companies, being gobbled up and spat out by the ‘big boys’.

Globally, Green economic policy calls for a “new order of cooperation between nations”. Put simply, we don’t want to see well-functioning businesses, with thousands of talented people and skilled workers, fall victim to huge, unaccountable overseas companies, leading to mass unemployment and the social dismay it causes.

But Greens do want to influence and incentivise companies towards ever more ‘worthwhile’ ways of doing trade – and that this should be necessarily measured in social and political terms – and not just monetary ones.

Now after decades of deregulation, we are now in a position where giant corporations and global capital are both apparently unassailable  – while also at the same time being completely unsustainable!

As the banking crisis shows, as well as the predatory nature of most transnational corporations, we desperately need a different type of politician to champion trade policies which will protect valuable businesses, local trade, real jobs and people’s livelihoods.

The Green Party has those policies.

Martin Deane
Hull Green Party.
—————————
1. Unite video statement on –
http://news.bbc.co.uk/1/hi/business/8467007.stm

2. See policy.greenparty.org.uk

Economics:  EC900 “new order”,  EC902 power of TNCs; EC921 protection against domination, EC942 replace WTO, more accountable, decentralised, EC943 increase local democracy and control over economics.

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4 thoughts on “Why the Cadbury’s buyout is bad news

  1. What I specially don’t like is that Kraft were buying up a successful company, by making huge borrowings, so that they could pay the highest per share to buy Cadburys . They are not buying it to make it Cadburys successful but to offset their own losses! This is all about dodgey money. It is all wrong.
    Hope you enjoyed you apple (English grown in Hull I hope!)

    Chris

    • Yep, predatory companies, predatory capital. – What’s worse for me, is that the Cadbury’s board has merely been holding out for a better offer for a few months. And also that the shareholders – and most shareholders are big companies rather than individuals – will rubber stamp their decision in a couple of weeks. Purely take-the-money-and-run at work here.

  2. I never been that keen on Cadbury’s chocolates, etc. I don’t really have a sweet tooth. Now, into a serious stuff: the public reaction concerns me, there’s all this outcry about Cadbury (don’t get me wrong, well founded) because is a kind of “cuddly” company. Kraft doesn’t have a good track record (Rowntrees), they’re not only buying to offset their own losses (and make Cadbury’s workers pay for their own mismanagement), but also to eliminate competition. Capitalism is supposed to be about competition, yet these global corporations are doing their utmost to destroy any competitor to their mega businesses. Tesco is doing exactly the same in our main streets. Choice is not being expanded, on the contrary. Here in Hull there are many more shops etc than they were back in 1976, yet then there was more variety (no, I don’t nessarily think that the older times were much better). There were several outlets where I could buy coffee, for example (although it was difficult to get Chilean wine then). Now, it is what Tesco can offer…

    Returning to my early point, why are people not making a fuss about The Independent being bought by a Russian oligarch with a very dark past?

  3. Thanks Pablo, astute comments as ever. I think most buyouts leave people cold. Unless they are directly affected, like Cadbury’s workers, or those at the Inde, most people wouldn’t have a clue. And that’s one way that big business wins – because it’s anonymous. They also have friends in high places, viz. the planning laws that make it very difficult to stop big things happening – like motorways, Tesco’s and airports.

    Cadbury’s has been useful to help open people’s eyes in that respect, I think. And then as a company committed merely to profit, why should we care? What do they really give back?

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