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Devil’s Advocate

Wednesday 20th January 2010

So it was announced today (well yesterday, but I’ve not slept yet so it’s still in my “today”, if that makes sense) that Cadbury’s are being bought by Kraft (who already own Milka, Toblerone and Terry’s). As far as I can tell, there’s been lots of negative reaction to this, but why? A business is (potentially!) being sold to another business, because it’ll make the shareholders money. The people who run the business have a responsibility to the shareholders to run the business to do make them money, so how can they be accused of “selling out”? A business exists to make money, and Cadbury’s is no different. Kraft say they want to invest in the site at Bournville (I suggest building a pub :-p) and maintain production elsewhere, and they also say that they want to bring more jobs to Britain, which can only be a good thing.

I might be missing something . I’ve been busy with revision and the like so I’ve not read the news too much, so if I am missing something, what is it?

Posted at 1:54 am | Posted In: Random Tagged:

6 Comments:

Fiona

Wednesday 20th January 2010, 4:09 pm

Ah, but, see, Cadbury’s is different. Cadburys has always been known for its workers’ welfare, and for its social philosophy as well as its profit making. So it’s a sad day that it’s being taken over by a company with potentially different objectives.

On the other hand, for the directors to not recommend that the shareholders sell their shares, they’re potentially in breach of fiduciary duty as trustees of the company, so the shareholders could have sued them. So they really had no choice.

Mmm. Toblerone.

Dickie

Wednesday 20th January 2010, 5:15 pm

At one time, yes. But more recently, really? I was under the impression that for a while now they’ve just been like any other large company.

Lucy

Wednesday 20th January 2010, 10:31 pm

True, there were no Cadburys left on the director’s board, but as long as it remained an independent company it only had its own history to answer to and its own worker’s interests to consider. That will no longer be there with takeover from a giant multi-national, and then it will just be another business.

Kraft say they want to keep Bournville. They also said, if I recall, that they wanted to keep the Terry’s factory in York which was gone within a year. If that factory goes then a) the local economy goes down the drain like happened in Longbridge, only in the midst of a national recession as well, and b) the community looses the focus that has always held it together. It would break my heart to see a pile of rubble there, it really would. You’ve got to admit it – where would you find another Bournville? It’s just not like anywhere else, and with the best will in the world, Dickie, no profit-guzzling American is truly going to understand that.

As for a pub… well… :-P

Dickie

Wednesday 20th January 2010, 10:52 pm

The comparison with Longbridge isn’t valid. Yes it would be a disaster for Bourneville/Birmingham if it closed, of course. But MG Rover was a failing company and Cadbury’s isn’t, so the optimistic part of me would like to think that the factory there would stay open.

It’s not been an independant company though, has it? And it’s not just had the workers’ interests to consider. It’s a PLC, so as Fiona pointed out (and I alluded to in the post), the company has actual legal responsibilities to its shareholders.

I have to say, I wish more businesses were being run in the “quaker” way these days; that is being run by people whose primary goal isn’t just to make the most amount of money. Running a business with a “social conscience” just seems like an obviously better way of doing things; Bourneville and Cadbury is a stunning example of that. So yes it’s a pity that ideal isn’t still around, but in truth I suspect that it died out a long time ago.

Lucy

Thursday 21st January 2010, 9:57 am

Bournville, not Bourneville :-P

I hate this world sometimes, I really do.

Dickie

Saturday 23rd January 2010, 3:04 am

Heh, can’t believe I got that wrong. Especially as I spelled it right in the post…

Anyway, I can’t disagree with the sentiment… :-(

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