Campaigners and union activists are meeting tomorrow (January 22) at Cadbury’s Keynsham chocolate factory to discuss their next move after bosses at the firm pledged to forge ahead with plans to close the site.
“We don’t accept what Cadbury is saying,” said a spokesman for the Unite trade union. “The show isn’t over yet. Not by any means. Cadbury says its wants operating profit margins to rise from 10% to more than 15% in order to get in line with competitors, and yet we know that margins at Kenysham are 16.4%. So why is it closing down?” He added: “We are not talking about strike action yet, but we have a mandate to ballot members over industrial action and we will use it if necessary.”
The Keynsham factory, which makes Fudge, Curly Wurly, Fuse, Turkish Delight and Mini Eggs, has been earmarked for closure as part of a cost-cutting plan, with production largely shifting to Poland.
Given that 98% of the products made at the factory are for the UK market, Unite claims the move would generate millions of unnecessary food miles with 18-19 trucks travelling from Poland back to the UK every day.
Union bosses presented two strategic plans to Cadbury over Christmas that make a business case for maintaining production at Keynsham. The more radical of the two involved selling the factory in order to generate enough cash to build a new single storey site in the same area that would consolidate production from several other factories.
Meanwhile, Cadbury's restructuring plan is continuing apace with the sale of its Monkhill confectionery division to Tangerine Confectionery in a £58M deal.
The disposal is part of a cost-cutting programme at Cadbury, which has pledged to drive up operating margins over the next four years through a radical restructuring plan that will see the closure of 10 factories and 15% of the workforce.
Monkhill, which operates three factories in Yorkshire at York, Cleckheaton and Pontefract and operates its own distribution centre in Derbyshire at Holmewood, near Chesterfield, is expected to make a full year pre-tax profit of £6.7M on sales of £76M.
While it shares some central functions with Cadbury, it has been run as an entirely separate business, selling own-label confectionery for the major supermarkets plus branded products including Butterkist popcorn, Barratt sherbet fountains and Jameson's chocolate confectionery.
Tangerine makes well-known brands including Princess marshmallows, Taveners and MOJO. It employs over 600 people at sites in Poole, Liverpool and Blackpool.
Chairman Steven Joseph said: “There is no doubt that this major acquisition will significantly enhance Tangerine, creating a business with a turnover of £150M and 1,500 employees. The combined entity will have an increased selling capability and a much wider product offering. Tangerine will be able to provide the trade and consumers with the most comprehensive sugar confectionery range available.”