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Post subject: Kraft Cadbury hostile takeover.
Posted: Tue Nov 10, 2009 6:36 am
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No one should be condemned to live where a rose cannot grow.
George Cadbury.


Well folks this is completely unrelated to guitars but very close to my heart and belly. Kraft (plasticized cheese manufacturer) is trying to take over Cadbury chocolates (YUM).

Now this may not seem of any consequence but let me fill you in on Cadbury chocolate's history a little.

1849 George Cadbury introduced his drinking chocolate recipe/formula to the world predating swiss Daniel Peter by 26 years.
Old George running his business from a sweetshop in Birmingham found his winning recipe required a bigger base of operation. He acquired some land then just outside of the ever amalgamating, expanding group of towns that formed Birmingham. He built not only a factory, but also a village to house his workers to a decent standard hence the opening quote. You see old George was a good man who believed everyone should enjoy a good standard of life. He was the first business owner to introduce pensions for workers, maternity leave, equall pay for women workers (who he absolutely encouraged). Infact England was a very rough country at the time. Alcoholism was rife among the working class, as was domestic strife when a wife would ask for money for food from a drunken husband who'd sank his wages. Nice wise old George C decided to introduce his own currency and shops to Cadbury Village. The workers wages would be paid half cadbury money, half sterling. No alcohol was available in the village as George was a devout Quaker. The workers could then only spend half their wages on booze consequently home life improved. Its still the same today Bournville (cadbury village) is without a doubt one of the nicest inner city area's in the country. Its like stepping from a industrial bustling city into a rural paradise. No joke ducks roam the roads. There is still today not one pub or shop selling alcohol in the area and it still houses Cadbury workers.

If kraft take over this will be destroyed. It has far further reaching consequences than the taste of a dairy milk.

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Posted: Tue Nov 10, 2009 6:57 am
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Hi Niki: well, in my heart I agree. Perhaps we make hostile takeovers too easy here - some other countries do that differently.

One point of detail however. My mother was a Quaker and I happen to know that some of 'em are very partial to a drink now and again... :wink:

Cheers - C

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Posted: Tue Nov 10, 2009 7:18 am
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Ceri wrote:
Hi Niki: well, in my heart I agree. Perhaps we make hostile takeovers too easy here - some other countries do that differently.

One point of detail however. My mother was a Quaker and I happen to know that some of 'em are very partial to a drink now and again... :wink:

Cheers - C


It all comes down to personal conviction. At the time when bournville was built alcohol was responsible for a good part of domestic strife. Hence cadbury's desire to make it unavailable within the vicinity of the village. Rowntree was very similar at the same time too.


Why do I know even know about confectionary manufacture in England during victorian times? :oops:

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Posted: Tue Nov 10, 2009 7:25 am
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BigJay wrote:
Well....what's the definition of "hostile" in cases like these?

Agreed, Kraft produces lots of horribly generic and boring, in fact tasteless, stuff that some people eat. Of course, their prices are quite a bit lower than higher grade alternatives and nobody forces anybody to buy Kraft products instead of higher quality and alternatively good tasting stuff. Kraft serves a market very well...people who cant afford Cadburry, perhaps.

But is Cadburry's rebutal a reflection of some moral adversity to Krafts plasticism? Or is it a suggestion that even Cadburry's high-brow fare is for sale, but only at a higher price?

So who is the bigger harlotte? The cheap one or the expensive one?


What are you talking aboout? Cadbury manufactures among other products a wide variety of chocolate bars. This isn't a company that imports lobster tails, or caviar.

It seems the offer was rejected anyway:

http://www.belfasttelegraph.co.uk/busin ... 57708.html

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Last edited by Twelvebar on Tue Nov 10, 2009 7:28 am, edited 1 time in total.

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Posted: Tue Nov 10, 2009 7:27 am
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BigJay wrote:
Well....what's the definition of "hostile" in cases like these?


Well in this case it's Kraft's own use of the word, this morning in the media. They put a £9.5 billion / $15.8b offer to the board of Cadbury, who rejected it as "derisorily low". Now they have put the same offer direct to the share holders - though with currency fluctuations the bid has in fact now drifted a little lower in real terms.

They have made a promise to keep open one particular factory that was scheduled for closure but have conspicuously made no undertaking to continue the ethos of the company, which is indeed just as Niki describes.

Ben & Jerry have made similar complaints concerning how their company ethos was abandoned after its takeover.

Cheers - C

EDIT: spelling...

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Posted: Tue Nov 10, 2009 7:36 am
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Sounds a lot like Boulder City, Nevada. It was built for the workers building Hoover Dam and was a dry, non-gambling town with some very strict moral codes. To this day it is one of the nicest, quietest places to live in Nevada.


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Posted: Tue Nov 10, 2009 7:39 am
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But Jay, Cadbury's chocolate products are competatively priced (at keast where i live,) So the expensive harlot cheap harlot doesn't really apply. the difference here is cadbury has a reputation of excellence, while Kraft does not.

The danger is that the larger entity will of coarse, lower standards to their prevalent level. Gut employment, and close factories. All the while using the former companies reputation and branding to sell a now second rate product.

Now from a corporate perspective, who cares? but as a consumer it is disheartening to see a beloved brand destroyed by a larger, but less reputable entity.

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Posted: Tue Nov 10, 2009 7:42 am
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Jay you are knowledgable on these issues. My guess is that very few of these types of takeovers actually outright fail. Companies just usually find the right price. Is that your experience?

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Posted: Tue Nov 10, 2009 7:48 am
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BigJay wrote:
Its just a negotiation.


For sure.

When I read Nick's first post I could immediately sense a row of folks lining up to explain how capitalism works, in case we hadn't heard.

But all business does not have to be the same. The two companies he named, Cadbury and Rowntree (which by coincidence were indeed both set up by Quakers), have been run along distinctly different principles than many others for the better part of a couple of centuries. "Ethical" is such a loaded word - but it's an approximate shorthand for what we're talking about.

Some people run businesses as if the bottom line is the ONLY factor that counts; others manage to profitably run companies that think about other things as well. A lot to be said for those ones...

Cheers - C

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Posted: Tue Nov 10, 2009 7:54 am
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I like good chocolate and this has happened before

http://en.wikipedia.org/wiki/Milka

This used to be a much, much better product pre-Kraft. They kept the packaging original and added bunch of artificial crap to a completely new line. That is business :roll:

Now thiese two companies share #1 in my books
as far as regular consumable chocolates are concerned.

German - http://en.wikipedia.org/wiki/Ritter_sport
Canadian - http://www.purdys.com/


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Posted: Tue Nov 10, 2009 8:00 am
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Well look at what Kraft did to the humble Terry's chocolate orange.

Think I'm going to buy some shares in cadbury's, keep atleast a small (tiny) part of it Brummie. Sod the les paul.

A very glum day in these parts.

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Posted: Tue Nov 10, 2009 8:05 am
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YZFJOE wrote:
Sounds a lot like Boulder City, Nevada. It was built for the workers building Hoover Dam and was a dry, non-gambling town with some very strict moral codes. To this day it is one of the nicest, quietest places to live in Nevada.


So you know the setup Joe. Its quite magical isnt it. Bournville is a suberb of Birmingham cross the street into northfield or selly oak on the other side and its debauchery rife. Its never seemed to cross that border line though. Even theives dont go there looking for targets.

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