Kraft in Cadbury job switch to Switzerland

By Jane Byrne

- Last updated on GMT

Related tags: Kraft foods, Irene rosenfeld, Revenue, Cadbury

Kraft Foods is transferring part of the Cadbury business to Switzerland in a move which could see it paying less corporation tax.

The transfer of certain roles within the Dairy Milk manufacturer to Zurich would enable the company to save on UK tax bills.

The rate of corporation tax in Zurich starts at 15 per cent, which compares favourably with the 28 per cent levied on companies in the UK. In June 1999, US firm Pepsico transferred ownership of its Walkers brands out of England and into a Swiss subsidiary, Frito-Lay Trading GMBH.

A spokesperson for Kraft/Cadbury told that there was nothing 'new' in the story, initially reported in the Guardian.​ "We have always said a small number of senior roles would relocate to Zurich, Kraft Foods is committed to the UK both in terms of manufacturing and office-based roles,"​ he continued.

The spokesperson said that: "We have been clear from the start that Cadbury would be integrated into our existing Kraft Foods business but we have also been very clear we were committed to the UK.

Indeed we recently announced that Bournville has become our global centre of excellence for chocolate, alongside our existing global coffee centre at Banbury. We have around 5,500 employees in the UK and pay substantial payroll and other taxes."

Kraft is expected to finalise the reorganisation next year.

But industry insiders comment that the restructuring move could serve to worsen the reputation of Kraft in the UK, which purchased Cadbury in February this year amid controversy. Soon after the takeover, the US food giant reversed a pledge to keep open a Cadbury plant in Somerdale, England, when it decided to move the factory to Poland.

In August, Kraft CEO Irene Rosenfeld reported that the integration of Cadbury into Kraft’s business was progressing well and that about one third of Kraft's top 50 executives were from the UK confectionery company.

The US food group noted then that the acquisition of the Dairy Milk maker helped the firm to a better-than-expected first quarter net profit of $937m (£590m), up from $827m in the same period a year earlier. And, reflecting the Cadbury acquisition, net revenue rose 25.3 per cent to $12.3bn.

Rosenfeld predicted then that the takeover would lead to even greater synergies: “In light of our strong earnings momentum, we will reinvest our 2010 upside to build our brands and to harmonize business practices."

Kraft added in its financial statement that in the company’s developing markets, net revenues increased 73.4 per cent aided by a 61.4 per cent impact from the Cadbury acquisition.

Related topics: Manufacturers, Mondelez International

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