Mondelez International has decided not to seek a ratepayer handout for the Cadbury Chocolate Carnival after its plan to do so sparked public indignation.

''Given the factory closure, we didn't feel it was appropriate to ask for council funds,'' a Mondelez spokesman said yesterday.

The carnival, with the Jaffa race down the world's steepest street, Baldwin St, a highlight, will go ahead as planned in July.

In February, the multinational company said it would line up for more council cash for the event.

At the time, Otago Daily Times readers expressed outrage at Mondelez's plan to apply for the grant while preparing to lay off hundreds of workers.

The Dunedin City Council gave the event $55,000 last year.

In the year to December 2015, Mondelez's New Zealand operation reported a net profit of $9.2 million.

University of Otago business school academic David Bishop, who worked for the company between 1973 and 1986, said the decision would help restore the damaged Cadbury brand.

''It is the right thing to do.

''If [Mondelez] continues with supporting community events, then it will help overcome some of the negative consumer reaction,'' Dr Bishop said.

DCC Enterprise Dunedin director John Christie said Mondelez had decided to cover the full cost of the carnival because of the ''legacy Cadbury has had with Dunedin at a difficult time for its staff and the city''.

The carnival runs from July 15-21.

eileen.goodwin@odt.co.nz