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News briefs: Cadbury, Hershey and Swiss confectionery

By Charlotte Eyre , 26-Feb-2008

The sale of Cadbury subsidiary Monkhill is finalised, a Hershey director leaves his post, and the Swiss sweet industry experiences stable sales at home but higher sales abroad.

Cadbury completes Monkhill sale Global confectionery firm Cadbury today said that it finalised the sale of its UK Monkhill business to the Tangerine Confectionery company. The transaction was first announced last month, when Tangerine agreed to pay £58m (€76.9m) for some of the country's most iconic Cadbury brands including Barratt Sherbet Fountains and Butterkist. The acquisition will also give Tangerine control of Monkhill's three factories in York, Cleckheaton and Pontefract, and its distribution centre in Derbyshire at Holmewood. It also follows Tangerine's acquisition of private label sweet maker Burton's Confectionery in August 2006. The company said that the combined strength of these buys will allow it to offer UK consumers a comprehensive range of sugar confectionery products. For Cadbury, the deal marks the end of a global disposal scheme for brands that it believes show limited potential for growth or margin improvement. Other brands that have been sold since 2005 include the Slush Puppy ice-based drinks in the US, and an Australian jam and jelly maker. Swiss exports increase, domestic market stabilises Exports of Swiss sweets increased 13.7 per cent in 2007, although sales for the 'saturated' domestic market remained stable, according to the country's confectionery and biscuit manufacturers' association. Figures released by Biscosuisse last week show that Swiss manufacturers sold 20,772 tonnes of non-chocolate confectionery in export markets, corresponding to CHF 231m (€143m). The lion's share of these products went to Germany, which bought 20.5 per cent of exports, followed by the US (19.6 per cent), France (13.7 per cent), and the Netherlands (10.1 per cent). However, domestic consumption remained stable compared to 2006, with 7,880 tonnes of confectionery products being sold within the country. According to Biscosuisse, this levelling out is due to the fact that Swiss consumers now eat 3.3kg of chocolate on average every year, a figure unlikely to increase. On average therefore, the country produced 28,652 tonnes of confectionery products, an increase of 9.6 per cent. Hard sugar confectionery was the most common product manufactured during the year, comprising 67.8 per cent of the total, followed by soft sugar confectionery and chewy sweets, the association said. Hershey director Edward Kelly quits In yet another board shake-up, Hershey director Edward Kelly has resigned citing his responsibilities at finance firm Citigroup. Kelly was one of the eight directors appointed three months ago in an overhaul of the board. The charitable trust that controls the company had made the changes after disastrous financial results in 2007. Hershey did not say whether Kelly would be replaced, stating only that he left "due to increased demands related to the recent change in his professional occupation." For the third quarter of 2007, which ended 30 September, Hershey reported that third quarter margins fell a massive 13 percentage points from the same period in 2006, blamed on tough competition in the premium chocolate market and rising milk costs. Operating profit also went down to $129m (€86.7m) from $322m (€216.5m) over the same period.

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