Tuesday, 15 December 2009

Cadbury - end of ethics?

This week the UK chocolate and confectionery manufacturer Cadbury, manufacturer of the iconic Dairy Milk brand among others advised its shareholders to accept a hostile take-over bid from US food conglomerate Kraft Foods. With Kraft's US rivals Hershey also entering the fray it would appear that Cadbury's existence as an independent is likely to come to an end after 185 years. British chocolate eaters will fear that the distinctive taste of Cadbury's products may be under threat; however the ethical stance of Cadbury's, something relatively rare in the food market, may also be under threat.

Quaker Chocolate maker John Cadbury first opened a shop in Birmingham in 1824 to sell drinking chocolate. By 1831 he had started manufacturing; the company remained a family concern and by 1879 Cadbury's sons established a new factory on a green field site at Bourneville, on the outskirts of the city, where it continues to manufacture today. At Bourneville the company established one of the 'model villages' of the nineteenth century for its workers, building detached houses with gardens (unusual in what was otherwise a crowded industrial city), as well as providing pension schemes, education, training and health schemes for employees.

It seems likely that such benefits were not extended to the firm's suppliers in the then British colony of Ghana in West Africa; but under ethical pressure in early 2009 the firm announced that it was moving to Fairtrade certification of its Dairy Milk brand. The Fairtrade Foundation aims to guarantee that farmers working for Cadbury in Ghana receive a fair living wage. Cadbury are rare among mid market chocolate makers in adopting Fairtrade, which is usually reserved for the high end manufacturers. It will be interesting to see whether or not Kraft or Herschey will value the Dairy Milk brand enough to retain its Fairtrade status; if they are wise they will continue with this as part of a premium international image for Dairy Milk, as well as continuing its manufacture at Bourneville, a crucial part of its 'Made in Britain' image.

1 comment:

  1. Postscript: Hershey also had ethical policies in their 'model' company town of Hershey, PA, in the early 20th century, and pursed welfare policies similar to Cadbury's - arguably they could be a better fit than Kraft.



About Me

London, United Kingdom
I'm Lecturer in Management at The York Management School, at The University of York, UK. I teach strategic management to undergraduate and masters students, as well as running the masters dissertation module. My research focuses on business and management history.