Company commits to UK but says consumers could pay more or get less confectionery as a result of exit from EU

Cadbury has said it may have to raise prices or shrink the size of its products after Brexit, but has committed to staying in the UK.

Glenn Caton, who is in charge of Cadbury in Britain, told the Guardian the company would change and adapt to the terms of Britain’s exit from the EU and that the country would still be the “home of chocolate manufacturing”.

Brexit economy: UK faces squeeze on living standards Read more

Caton said the first focus would be on boosting productivity, but that the company may eventually have to pass on higher costs to customers by raising prices or shrinkflation - selling smaller products for the same price.

He said the brand would have to make these changes to protect the quality and taste of its chocolate. Cadbury would always “put the consumer at the heart and never compromise on quality and taste,” he added.

Caton is the president of the northern Europe division of Mondelēz International, the US owner of Cadbury. The firm fell into American hands when it was controversially bought by Kraft for £12bn in 2010. Kraft then split into two companies. One business retained the Kraft name and focuses on US groceries, including its famous cheese products, while the other was renamed Mondelēz and owns confectionery and snacks brands including Cadbury, Toblerone and Oreo.

How has the Brexit vote affected the UK economy? March verdict Read more

As part of Mondelēz, Cadbury has experienced a number of public relations gaffes, from changing the Creme Egg recipe to putting round corners on Dairy Milk bars and allegedly paying little tax. In recent months it has come under fire for changing the shape of Toblerone and increasing the space between the chocolate triangles so that there is less chocolate in a bar. It has also increased the price of Freddo chocolate bars by 20%.

Caton, however, insists Mondelēz is good for Cadbury and that the US company has invested more than £200m in the business, including £75m on modernising manufacturing at Bournville in Birmingham, the home of the brand.

“I passionately believe we are fantastic guardians of the legacy of Cadbury and all of our other brands, and we are great owners of this business,” he said. “The investment that we have put in it in the last five years proves it. Our commitment to quality is absolute. I think this is really modern British manufacturing at its best.”

Caton also defended the tax Mondelēz pays. The company paid no corporation tax in the UK in 2015 and 2014, the last years for which figures are available. He said: “The simple thing on tax is we pay all of the taxes in an absolutely above-board legal way according to the regulations of parts of the world that we operate in. We do pay, as a company, billions of dollars in tax on a global basis.”

Cadbury was founded in 1824. Caton, who joined Mondelēz in July 2013 from Direct Wines, said investing in Cadbury had paid off: “We have significantly improved productivity and competitiveness. If you go back five to 10 years ago it was costing roughly three times as much to make chocolate in the UK as it was in Germany. It required investment in order to make sure that we increased productivity and were competitive globally, and we are now.”

'The Brexit vote is starting to have major negative consequences' – experts debate the data Read more

As well as being a factory, Bournville is also Mondelēz’s global centre for chocolate research and development, with the team growing from 25 to 250 over the last five years. There is also a factory in Sheffield that makes Jelly Babies, Trebor mints and Ritz crackers, and a global food science facility in Reading.

According to Caton, none of that will change when the UK leaves the EU. He said: “It [the UK] is still going to be a huge market. It is still going to be the home of chocolate manufacturing, it is still going to be the home of global research and development. We are still going to have Reading as the centre of science. None of that changes.

“There are obviously challenges and there are three things that we really care about in the context of the Brexit negotiations. First of all is making sure we have a stable and thriving UK economy. If the economy is growing all businesses benefit from that. The second is ensuring that there is no new, more complex regulation and that there is free movement of goods and minimal barriers to trade. Regulation impacts complexity, complexity impacts costs, as do trade barriers and tariffs.

“The third area is skills. We have 50-odd different nationalities in our research and development centre in Bournville and we do want security for those people. So we want EU nationals who are working here and living here to have the security that they can continue to do so.”

If the Brexit deal does not deliver those three things, Caton says the company will have to adapt. “All we can do is to move to the times that we face. I am confident though because a £200m investment in the last five years is not something we are going to walk away from. I can’t guarantee anything forever but am I confident that we are still going to have world-class manufacturing and research sites in the UK for the long term? I do feel confident of that.”

The UK’s incredible shrinking chocolate

A Cadbury Freddo bar is basically just one big mouthful, but its price has recently jumped 20%. This month the recommended retail price of the chocolate frogs, which weigh 18g (0.6oz), leapt from 25p to 30p.

Mondelēz caused a furore when it revealed a new-look Toblerone with wider gaps between its distinctive triangular chunks. The ruse reduced 400g bars to 360g and 170g bars to 150g. The price did not change.

Cadbury sparked an Easter egg hunt when a pack of six Creme Eggs was whittled down to five with only a slight decrease in the recommended retail price from £3.05 to £2.85.

Mr Kipling has also become less generous this year, serving up eight rather than nine Angel Slices in a pack. Made by Premier Foods, the smaller packs have a recommended price of £2.25, down from £2.39.

Zoe Wood



