A bigger Cadbury bid may be worse for jobs

Perhaps if the taxation and incentives were such that it were possible to start up a few brand new confectionery companies in the UK (as soon as another monster is sold abroad) then we could always regenerate.

For the past generation, the sitting gubbmint has been asleep. New jobs and new ideas is our future.

Monster corporations like Cadbury/Hershey or Cadbury/Kraft are nonsensical. The overheads their like carry are entirely disproportionate, and -in my opinion moderators- the only reason it (appears to) work out for them is in manipulating the end-consumers price in the store.

As far as I am concerned, a better-tasting chocolate bar on the shelves would have a huge market. Now where would I get the funding to start one?
Have you got Mandy's no.?



Regards,

Another British company sold off, no doubt at our greater long term expense. We should be truly European and have legislation to protect our industries, lest we move further to the unsustainable service sector. If the last 18 months have taught us anything it is that we need to retaain and strengthen traditional industries in this country, not let them be taken overseas at the benefit of city investment firms.

As far as I can tell the true price of Cadbury shares should be around £6.00, the price having been driven up by speculation as to how much the prospective new owners are willing to pay.

That difference of £2.00 or more will have to be made up from somewhere and that somewhere is the workforce and the customers (I don't think the shareholders of the buying company will want to pay).

Manufacturing will be moved offshore to the highest subsidising government, the new workers will be paid less and the customers in the UK will see prices remain the same or rise.

Profits will rise though and the new owners will be pleased, hang on though, won't the new owners (the pension funds and institutional investors) be the old owners (the pension funds etc.).

So the winners are...the financial institutions taking big fat fees for changing the name on the packet.

It's a real shame to see Cadbury go, and I think both Kraft and Cadbury's shareholders know that once it does, they're going to be fasttracked to being the most hated people in Britain - not that that's going to change their insatiable desire for profit that seems to be going perpetually outbound.
As you mentioned Robert, I'm not being "Daily Mail-ist" when I say that sooner or later our entire country will be owned and managed from abroad.
Which is why I wish a kind of nationalism be instilled upon the captains of what is left of our industry. Go to an office New York or Chicago and the offices are littered with stars and stripes.
An office in London or Edinburgh? Not a flag in site.
Perhaps if the afformentioned hedgefunders and shareholders worked under the supervision of a Union Jack, they might remember who they're working for better than they currently realise.
Although I should say 'realize'. That word's owned by Microsoft now.

The loss of key and arguably strategic infrastructure to foreign interests is particularly concerning (from Airports, Ports, Electricity distribution and most generation, nuclear power and water) and could be argued as a serious dereliction of the first duty of a government. The result is not only a threaten our security but will also mean that by far the majority of the high value adding work caused by the future replacement of nuclear power, upgrading the National Grid or manufacturing and installing the recently announced wind power will export money and jobs overseas. Interestiungly whilst apparently the UK operates under EU rules prohibiting state support to our industries it is often partly goverment owned companies of France, Germany and Spain which have been on the buying spree of our infrastructure in the UK. Equally fascinating it is they who will be benefiting from the inflow of money and high tech jobs.

So it seems that short term greed, profit and "growth" are a universal human weakness, and not just reserved for our banking fraternity.

Experience from looking at post 1980's takeover events predicts that Cadbury will be extinct within 20 years, losing the brand, technical know how, employees and infrastructure.

However a few people will be marginally better off, so that's OK.

Still we can always just eat cake...

If Cadbury are to be sold and production moved overseas, surely we would want guarantees that the distinctive taste of UK chocolate does not become the awful taste of candy chocolate!

This comment was removed because the moderators found it broke the house rules. Explain.

If the economic events of the last 12 months have taught us anything, surely it is that finanicial statements should not be the only guide to a company's value.
We have reached a stage in this country where the government (or an independent body) should intervene in a takeover situation to ensure that local communities are not damaged.
In the case of Cadbury there are a number of interest groups that have sprung up, such as Friends of Cadbury, that demonstrate the importance of this company to wider stakeholder groups.
All investors in Cadbury should be aware that selling out to Kraft, or another bider, will threaten tens of thousands of jobs in the UK.
I ask all Cadbury shareholders to act as responsible stewards to Cadbury and not to sell it down the river for a quick buck.

Maybe the idea of extra tax for BIG banks should be extended to all businesses that get too big?

Good article.Mandelson will say what he does for politics. The government and the EU have lowered the barriers to foreign capital moving on our industry at home and the City happily procure at a fee.China have a state-strategy to handle this, why dont we? But,on the flip-side, lets hear about UK companies doing the same abroad. I am sure they do. If they dont, we're in real trouble.

To me, Cadbury is a bit of a side-show, at least in the sense that making chocolate isn't a strategic industry. Most of our strategic industries - steel, airports, power generation, water, and even, believe it or not, nuclear weapons production - are already foreign-owned.

Most governments talk about being open to foreign investment, but ours is the only one daft enough to actually believe it. Can you imagine a British company being allowed to buy up French power generation, Spanish airports, a Chinese newspaper group or an American utility? Obviously not.....

hmmm this is what happens when companies get sold though, its happened since the sell off of everything since the 80's.

Buy company that owns its own building pension fund etc, sell off assets move production elsewhere. This is globalisation for you. The jobs will tend to move to the cheapest place, ie China or one of the Eastern Bloc countries, it has happened with lot of American companies too, but this is what happens in recessions and it will happen again.

It just makes the headline on the Beeb website about Government saying we need to export and grow out of the debts the banks have dumped on us,
so we will export what exactly, whiskey ? oil ?

Don't worry though these new high tech companies will fill the void, ah but they will be bought and production will move overseas as it will be too expensive to do business in the UK.

Maybe we could dig up a Keynes figure to renegotiate the countries debt, ah wait he was rubbish at that the last time round, I suggest Mandy gets on the blower and phones Disney to see if he wants to turn the UK into a theme park

I have just noticed that my bar of Bournville is labelled as made in France.

Robert

According to 'https://news.bbc.co.uk/1/hi/business/8442307.stm on January 6th

BBC business editor Robert Peston said Kraft's plans to buy Cadbury were now in jeopardy.

Today you say..

'he needs to have the relevant players around his table.'

Give your passion for banks, I find surprising that in neither article so you mention that the Royal Bank of Scotland, majority owned by the UK government, is helping to fund Kraft's proposed takeover of Cadbury.

https://www.guardian.co.uk/business/2009/nov/22/rbs-cadbury-kraft-hostile-bid

Strangely, I cant find any mention of this on the BBC website.

I'm surprised you don't mention the billions of pounds held under the UK asset protection scheme for RBS loans to foreign entities

Perhaps Mandelson should be talking to RBS.

Perhaps he should have done this months ago.

Here's a dilemna for the taxpayer.

The UK taxpayer (all areas) owns a bank, which has decided to sponsor a football team in 1 specific area (Newcastle)

Is that right? Is it fair? Why would an ardent taxpaying Exeter City supporter (for example) want to contribute towards the running of a North East team?

Oh the moral maze of semi-Nationalised zombie banks - once they pop - you can't stop.

https://news.bbc.co.uk/1/hi/business/8465058.stm

Not the first time new Labour gets confused about the operation of free enterprise. It normally does not have a problem when it comes to selling off public assets to massage the PSBR so why complain when the next step - foreign takeover - affects a longstanding private company?

Perhaps an industrial strategy of supporting british industry would help - something for G Brown's "let's pretend we have not been in government for thirteen years" election manifesto.

This is what you get when you treat a company as being no more than it's balance sheet; and, for that matter, a country as no more than its economy. It is the logic of accountants and economists - in which everything can be reduced to a monetary value.

The question it poses is one of "values" - and whether there are any values, of any kind, that might be thought invaluable?

`Those whom the gods wish to destroy they first make mad.'

If there was ever evidence to suggest that Big Business and Big Government cooperate to screw the little people; this is it.

Cadbury will get swallowed by some ego driven global entity at a high leveraged cost leading directly to factory closures in the UK and the further brutalisation of our domestic economy.

The idea of a free economy is that it sustains the economy of the country: not sell it off to close factories and make people unemployed. If this is the price of a free economy then it is too high a price. We must stop rupturing industries and jobs.

The big question we need to ask is why is it that nobody wants to buy the government? Obviously it has nothing to offer the erstwhile buyer.

Says it all really: make a good product and people will wish to buy it. Do nothing but shout at a mirror in the bunker and people just look the other way. This is the real difference between the modern British Establishment and the nature of true economic value.

Not too bothered about this one. The US don't know how to make decent chocolate and UK manufacturers have been in foreign ownership for years without detriment to the consumer e.g. Rowntree being part of Nestle. In any event we're re-learning that to survive you have got be global. By the way do the Chinese make chocolate - they seem to make most other things?

Chocolate as an industry does not seem to be going down the plug-hole.

Cadbury does not seem to be failing in the market place or suffering a financial crisis.

The only way to close it down is therefore to put it into foreign ownership and hope another remnant of UK manufacturing will be crushed under a global jackboot.

Our rulers are not stupid, you know.

Cadbury was floated on the stock market a few years ago. Why are we only now complaining that a "UK" company may no longer remain within these shores? It is no more a UK company than any other entity in which you can purchase shares. I doubt the majority of its workforce are currently located here, for one thing (Cadbury have a huge manufacturing facility in New Zealand, for example).

This renders much of the discussion about who owns the majority of this once-British company fairly redundant. It should scare up share prices very nicely for the highly vocal/complicit Cadbury family though...

#16 Indeed

#20

But your chocolate orange is now being made in what was eastern europe, not York.

RP, I'm a little surprised the actions of the banks has not been mentioned in this. State owned RBS are financial advisors to Kraft foods in this hostile takeover. A fact they kept quite for some time from thier long term customer Cadburys. Barclays capital are putting up £9.2billion of the investment money for the hostile takeover, remaining coy over any role as adviser, and cutting coverage of Cadbury.
Still Lord Mandelson has given a public warning to foreign buyers of British companies that he does not want to see them stripping assets or going for short term returns at the expense of jobs and investment. I'm sure the bankers are quaking in their boots (not!)

".....and a significant re-working of the government's approach to the ownership of companies, which had been that overseas takeovers are generally good for the UK, in that they inject new management talent and capital into the UK."

It was this bit in your piece that interests me. The idea that the UK is politically comfortable with foreign takeovers because of the injection of "new management talent and capital..."

I can appreciate how capital and new management injection might happen with a utility company, (because they could hardly move, say, our water industry to China.) But the idea that we get new management talent and a (long-term) capital injection and NO asset-stripping, job losses, short term returns, in other ventures just doesn't feel like it, not one iota! The politicians have NOT proven their case at all.

If it was true, then where is Britain's manufacturing industry?

You also make the point that once all the shouting is over and, "when the bid battle is just a dim memory," the takeover company (usually after about 3 years,) then goes ahead and is able to do "the dirty" on Britain and its workforce because of weaker employment and industrial laws in the UK, in comparison to those in Europe. (That's why we haven't got a manufacturing industry!)

This weaker position is supposed to be of greater economic benefit to Britain over time. Yet it was Germany and France that came out of recession first. In fact such has been the strength of the German economic recovery since, that investors were placing serious bets on the Euro strengthening, in the belief that the ECB would be raising it's (base) rates THIS month! (It didn't.)

The politicians need a re-think! Of course "they're" going to asset-strip the place, in the end! To think otherwise is just naive.

16. At 12:04pm on 18 Jan 2010, writingsonthewall wrote:

The UK taxpayer (all areas) owns a bank, which has decided to sponsor a football team in 1 specific area (Newcastle)

I thought Blair had left the government. Is he still pulling the strings ?

Its just another piece of our wealth-creation leaving the country.

Globalisation is out of control and will eventually see all but a few as slaves to big (soon-to-be world) government and big business.

Is it really all we can do to stand by and watch helplessly as the money-men snap up every last major means of wealth-creation we have, and move it to another part of the world where they are so poor that they are happy to work all day for basic human necessities?

Is this not the only possible outcome of the way things are going?

We need to halt globalisation and assert our local authority. If this means voting out of the rat-race that is global banking and big business then so be it. The route we are on leads only to misery and poverty.

Just my 2-pen'orth.

....just as writingsonthewall pointed out before - here come the lies.....

Double dip? - we were never really out of depression

Oh but it's OK - because we can safely tell our fragile selves that the 10 years of Austerity was simply 'bad luck'. I mean who could have known we would get a 'double dip' - we fixed it once already!

Absolute RUBBISH

More lies from those who value the failing system more than your liberty, sanity and ultimately lives.

It's like an 'Economic wind from the West' which apparently caused this mess - even though one has never been documented before, and consequently not defined as to the source of this 'wind'.

Why are the Government using nautical and meteoroligical references to the Economy?
Answer - because the Economy is sinking like a holed sea liner, just as the excuses were found for the Titanic sinking so fast at the time, it took a good hundred years or so to reveal there was a 'fundamental flaw with the ships hull'

Maybe in 100 years time people will look back on Capitalism and laugh about the idiocy of the 20th century man who refused to look for the cause of his Economic woes - instead laying blame on the Captain and the 'unforseen' iceberg.

What the Cadbury story tells us is that the Govt has actually no intention of rebalancing the economy.

It also tells us that Hedge Funds will continue to be able to do what they want. Is it 14 or 15 of them that have bought into Cadbury with the aim of simply turning a profit on the sale to Kraft?

And finally it also tells us that the behaviour of the banks isn't going to improve either. RBS should be ashamed of themselves.

18. At 12:09pm on 18 Jan 2010, tFoth

Very good point, the human race has managed to 'categorise' everything - and now it wants to categorise us all against a scale of value.

Sadly, the one aim of Economists is something they continuously fail to do - making them incompetent in my book.
They try to value everything with their systems, but as we can see right now, every time this ends up in the 'value scale' i.e. price, losing all relationship with underlying value.

Hence - overproduction, hence devaluation required (recession), hence the ability for bankers to pay themselve huge bonuses based on 'future profits' which may or may not eventually exist.

What the papers don't say.

Remember the JPM profits headline? - well read this and see the other side of that spinning coin...

Big banks still losing billions with consumers: Until last week, the consensus opinion on Wall Street was that the troubles at the BIG banks were over; that to close this chapter in history, the only task remaining was a mop-up operation at smaller regional and community banks around the country.

That theory was shattered on Friday when JPMorgan Chase revealed it was forced to add $1.5 billion to its consumer loan loss reserves. The big problem: When it took over Washington Mutual last year, the biggest failed S&L of all time, it inherited a cesspool of mortgages that are now going bad at an accelerating pace. Other big consumer banks — like Citigroup and Bank of America — likely face similar woes.

The trading profits of big investment banks are a bubble: What most Wall Street bank analysts still don't seem to recognize is that the giant trading profits they've been so enthusiastic about are generated by the same low-interest Fed policy that created the housing bubble — and is now in the process of creating MORE bubbles.

Without the Fed's largesse, without the low-cost financing, and without the big risk appetite it generates, most of the big bank trading profits would have been impossible. More to the point: Just as soon as the Fed finally executes an exit plan, the bulk of those profits are likely to turn to losses.

...and we are no different on this side of the Atlantic.
Recession over? - don't make me laugh, helmets on folks the real bombardment is coming this year...

It just about sums up this government's ridiculous love affair with big business, which they just don't understand (... they have never understood) and of which they are quite terrified.

The gist of it is that they have abdicated the role of representing the public interest in business policy, because they continue to believe that businesses will act in the public good rather than in their own business's good!

This is a catastrophic misunderstanding.

If you run a government thinking that business is not trying to do the best for itself, then you are deluding yourself. It is up to the government to arrange the playing field, not the players. But once done, the players should then be left to get on with it.

We need a completely new business policy, based on what every research paper has shown, that the vast majority of take-overs destroy value.

We need:
- new laws reducing the % of market share that is deemed to be anti-competitive i.e. if this is presently around 30/40% then it needs to be reduced to 10/15%
- a normal rule of thumb that the only way you can acquire a larger market share than 10/15% is via organic growth, unless there are exceptional circumstances

Dare I say it.... we need something a little closer to the German and French models!

Putting this in another perspective - along with the huge demanning process that needs to happen over the next 10 years in the non-productive "financial services" sector in the UK, we need to build up the potential of the productive sector - manufacturing, technology, research and development etc etc - to employ more of these smart people. One of the ways of doing this in the UK's industrial policy will indeed be to enforce lower "dominant" market share hurdles.

20

You should probably take a trip to York to find out whether the 'consumers' there find the result of Nestles taking over of Rowntree to have had no effect.

Whilst you see nothing in the supermarket that marks this change, the people who used to have jobs making it, the associated suppliers of services, materials and equipment, the treasury (these people no longer pay taxes for example) etc certainly have noticed the difference.

Good blog, it's about time someone realised tha this global village/free market nonsense does not work.

I have posted on the BBC blogs about this before - the fatc that a company can be worth (on paper) less than the value of it's assets, sometimes even less than it's fixed assets, is such an obvious flaw in the market approach that I cannot understand how no-one has seen this yet.

Markets are not infallible - history has shown a "run" on stock in the past and these things are about the nebulous "confidence" rather than reality. There must be a better way. If we have to have shares (and it is not writen in stone that we do have to have shares), then we must have a more independent method of valuation than supply and demand.

And we also need to get these Labour idiots out and revamp laws on takeovers:

1. Leveraging should not be allowed (possibly a buyout by the workers themselves may be exempt subject to restrictions on re-sale).

2. It must be demonstrated to a body similar to the monopolies commission that the takeover is in the national interest

3. Any part of the infrastructure of society is off limits - power, water, banking. Basically anything you have to bail out if it fails. And the corprorate structures must be within defined limits to prevent for example tax evasion, offshoring of work and the scenario we saw in the banking crisis where the retail banking sector (which needed to be bailed out) was intertwined with other operations (that did not need to be bailed out) such that the bill for the whole mess was picked up by the taxpayer. asically, if you want to part of the infrastructure, there are very clear constraints within which you must operate.

And I'm sure we can all add to that list. But essentially, having company valuation driven by the herd mentality of a totally unfettered stock market is clearly NOT the way to do it. While we're in the business of navel-contemplation, let's realise that this is a big part of the problem and urgently needs a solution.

We will always be stuck with boom-and-bust as long as it is left up to that kind of uncontrolled mechanism. A more transparent approach to running companies with greater emphasis on disclosure requirements would help.

As would less emphasis on running a company for it's shareholders over the interests of it's customers and society as a whole. Shareholding is an intrinsically selfish activity, unless you're a Warren Buffet who realises that the long-term strategy is the only way that truly works - customers are the only people who have an interest in the long-term. Customers need to be given powers aliong the lines of shareholders, backed up by the right institutions.

But as long as we have political parties funded by businesses, and directorships waiting for the retiring politicians... we will always have wrongdoing in our corporate dealings.

As much as I despise Lord Mandelson he is right to get involved in this. As you point out Kraft is funding this takeover by borrowing money. And the Cadbury workers will pay the interest on this borrowing with their jobs.

Lord Mandleson should just reject the takeover and tell Kraft to come back when their balance sheet is strong enough not require borrowing. Or their shareholders have the confidence in the board to allow them to create more shares.

There appears to be little that can be done if Kraft are indeed, so many months later, prepared to up their offer after all. In the circumstances, British jobs would be safer under Hershey's ownership, who lack a cheap manufacturing base in Eastern Europe. This appears to be the least worst option.

If this were a cash deal, I could perhaps understand shareholders' views, but what Cadbury investor would want to hitch their fund's value to the much more variable fortunes of Kraft? Especially as many UK funds will have an obligation to sell those foreign Kraft shares, just as Kraft's shareprice, depressed by the offer already on the table, tumbles further at the higher offer, and then even further as a glut of forced sales come onto the market at the same time. I am baffled.

#7. yam yzf wrote:

If Cadbury are to be sold and production moved overseas, surely we would want guarantees that the distinctive taste of UK chocolate does not become the awful taste of candy chocolate!

I don't know how they have the nerve to call it chocolate in the first place. Arguing about the relative taste of a bar of "chocolate" when >80% of said bar has no relation to cocoa (in any shape or form)is just being pedantic.
Yes the 'distinctive taste' of sugar, palm oil and milk solids will be replaced by the distinctive taste of sugar, hydrolised vegetable oil and milk solids and probably the cocoa content will diminish further, but really, who cares? It was rubbish anyway.

This is on the same day as Ernst & Young Item Club are suggesting the only hope for our survival is to refocus on exports/manufacturing.
Oh dear! poor sweet young things thought they had come up with such a new and innovative idea, when we are just about to face an election in which the Tories are expected to win!
Who was it in 1979 who waged war on our manufacturing industries and destroyed what countless generations had worked so hard to achieve. Dear Mrs Thatcher and like leemings or lambs to the slaughter we will all do what we are told to do by the press & media and vote them back in.
We were all told and we all believed her, that the way forward was in finance in the city of London, they were so successful at what they did we didn't need manufacturing. The City was going to solve all our problems, instead it bankrupted the rest of us and now carry on as if nothing happened on their watch. Labour continued her policy.
We had highly skilled, highly talented people producing some of the World's finest products.British goods were highly prized all over the World, not anymore sadly. We had the innovators, the inventors etc etc all gone.
Where do Ernst & Young think that is all going to spring from? It takes years and years to build up a superior manufacturing base and seconds to kill it.
Then they suggest that we look to new markets and should be looking to export to China. Do they not realise China have all our manufacturing companies and if they don't produce it themselves, its probably because they don't want or don't need it!!
We could try selling them Kendal Mint Cake or Betty's cakes (or are they made there too)

We should not be looking to export because at this point in time we have nothing to compete with but we should look to becoming self sufficient and instead of having products (often poorly made) trundled half way round the World increasing our carbon footprint we should make the products we need for ourselves. We could even bring pride (a rarity) back into this Country and also drastically reduce the imbalance between our imports and our exports. There has to be a tipping point where more income is going out than coming in. What then?
We have to stop pretending we are a World player and look to rebuilding this Country from the bottom up, not the top down. Another one of Mrs T's famous policies was of trickle down. Give most to the top and a little bit trickles down to the rest of us and I suspect life will be like that again after June.
You may not like what we have now but can assure those who don't remember, life under the Tories before was a whole lot worse for the vast majority, than it is under the present Government. Don't believe me? Wait and see!
Be Oh so careful what you wish for! a Leopard doesn't change his spots and 'The Lady wasn't for turning' so guess the next generation won't either.
I am not a Labour voter but may just do it this time because the thought of a landslide victory for the Tories horrifies me.

It is not about jobs more about how the balance sheet looks.
What does the country do in a few years time when manufacturing fades from memory, there are no jobs outside banks (and not too many in) and when there are so many claiming support what do all these big companies do then when we all stop buying goods and services ..... the Sky box, the mobile phone, chocolate, newspapers, holidays.... that type of thing

33. At 1:11pm on 18 Jan 2010, Noideaatall wrote:

"The gist of it is that they have abdicated the role of representing the public interest in business policy, because they continue to believe that businesses will act in the public good rather than in their own business's good!"

This is the theory to which all free marketeers subscribe, they actually tell us in one breath that business and consumers are 'rational' - and then in the next they suggest that a rational business won't:

a) Try to obtain a monopolistic position (Corner the market)
b) Form Cartels and engage in collusion
c) Try to break, bend or circumvent any regulation in it's way
d) Make 'excess profits'

All of which are irrational behaviour for any business. The ccontradictions of one class of society set against another cannot be resolved with reason - instead we get more and more ludicrous theories which cover up the underlying contradiction - a contradiction, which if accepted, will fundamentally change our entire Economy.

What do these people fear? - MERITOCRACY.

The fact is that if we did not have an old boys club, and if we did not have the incestuous, racist and sexist manner in which business is conducted.

ALL THESE PEOPLE WOULD BE JOBLESS.

Don't you ever wonder why the VAST MAJORITY of CEO's are white men aged over 40?

Surely we don't have an entire section of the population which is markedly brighter and more aware than the rest of us?

Of course we don't - this is why they don't understand Capitalism

Get a banker on here to explain how his profit is made. I have been calling for a long time, a simple request, and yet not one person has managed to show the source of the banking profit.

IF THEY ARE SO CLEVER - LET THEM SHOW THEMSELVES AND JUSTIFY THEIR TALENTS

WHERE ARE THE TALENTED BANKERS? - WHY DOESN'T THAT KING HAVE ANY CLOTHES ON?

Let's not forget that the moment Cadbury became in-play, the pension funds, which invest the dwindling futures of everyone in the private sector, will have sold up asap to the arbitragers and the speculators, so any higher offer will serve only to benefit the likes of hedge funds.

I wonder if Ayn Rand could have forseen a variety of looters so far removed from socialists, and as affluent the financial elite of our era?

35. At 2:09pm on 18 Jan 2010, chris911t

It's about PE took a kicking too.

How does a PE firm work?

- just like "remortgage your home to clear your debts with one easy payment"

Has there ever been a PE takeover where there were genuine efficiencies enacted?

Can anyone name any from history?

39. At 3:22pm on 18 Jan 2010, Angela Colbridge

...in 2005 Labour obtained a mere 22% of the votes eligible to be cast.

Anything but a Tory (or unlikely Labour) landslide and this number could be even lower.

There comes a point where the rulers no longer have a mandate to govern. The dreadfully low amount of votes required to 'run the country' is a damming indictment on the country's disgust of the electoral system as well as the 'choice' offered by the main parties.

If they poll less than the last time I shall not be taking any notice of any new laws passed through the term - we are all heading for rule by minority - aka fascism.

Spoiled ballots are the name of the game next election - they must be counted and there is a good chance more people will damage theirs than vote for anything on offer.

May / June will be your opportunity to bring change.

Are we ever to see the end of this mantra that selling everything to foreign buyers is somehow good for the country. Whose country? Not for the poor devils who will see their jobs go as a result of this takeover. Or the support businesses that will disappear. Or the consumers who will face a growing monopoly. Only the City vultures who have been peddling this myth for so many years will profit, because it is entirely in their interests to do so. They make fat...very fat fees out of this type of thing and have spent years dripping the poison into the ears of any politician who will listen, that the British economy should comprise solely of financial services and property speculation. Anything else is a "sunset" industry and should be disposed of.

I had hoped that recent events would demonstrate to the wider country that this miserable strategy of allowing speculators to slowly devour corporate Britain has to stop. No chance I'm afraid. The "money-men" are so deeply entrenched in the highest echelons of politics that they can easily bamboozle the assorted career politicians whose business experience wouldn't add up to managing a sweet shop.

We have been wilfully and perhaps terminally sabotaged by our supposed leaders, especially Gordon Brown who, in private has described manufacturing industry as an "irrelevance". Now did he come that view himself or was helped at some point along the line by one of the Masters of the Universe?

"Here's one definition of this government's industrial policy.

Foreign companies are welcome to buy our airports, our nuclear power industry, our motor car manufacturers, our steel manufacturer, our mobile phone providers, and so on. But they mess with our leading chocolate maker at their peril."

Does this remid you of France's claim that its yoghurt maker, Danone, was a 'national champion' of strategic importance in order to block foreign takeovers, and then people like Sir John Sunderland ex of Cadbury and President of the CBI ridiculing France, US and Spain for their protectionist approach to foreign mergers and acquisitions.

There must be something about chocolate and yoghurt.....

If this takeover happens (and personally I hope it does not) then never fear; we will be told how it shows confidence in the British economy and how inward investment is such a good thing.

You can believe it if you want. I certainly won't.

41. At 3:39pm on 18 Jan 2010, writingsonthewall wrote:
'I have been calling for a long time, a simple request, and yet not one person has managed to show the source of the banking profit'

Well WOTW as I understand it, it works like this on a simplistic scale:

Loan money created = - £100
Loan money repaid = + £100
Interest on loan = + £10
Overheads = - £5

Profit = + £5

#42

I'm pretty sure she did

Post 39 Angela Colbridge, I just don't understand how you can be so blinkered in your views. Whilst it is difficult to imagine that the UK could be in a worse state than it is now, the seeds of our industrial decline were planted a long time before Mrs Thatcher came onto the scene and gave us a chance to sort out the mess that we were in. At least she had vision and the will and ability to drive her vision forward rather than the current bumbling incumbent. No way after three full terms in government can Labour (nu or otherwise) blame their predecessors.
I don't post very often so I'll use this rant to clear up a few issues but personally, I always go out of my way to check that what I'm buying is made in the UK or in the worst case Europe. It makes sense to me. I don't want my job disappearing (I'm in heavy Construction) so in return I try to do all I can to support those who help to create my job. So I buy British. I do not buy Chinese cr*p what is the point, it is more expensive in the long run because it will break and need to be replaced with something properly made.
Congratulations to Gordon with the scrappage scheme. The most popular car bought under the scheme was I understand a Hyundai so you destroyed British jobs repairing older cars in garages, you sent our pounds abroad and boosted the Korean economy probably with money borrowed by people already overspent. Nice one (see what I mean about the current bumbling incumbent).
What we need now is a new Mrs T someone with the courage and vision and energy to take on the current UK disaster and sort it out. And while they are at it, to sort out once and for all the ludicrously self serving remuneration package for the whole financial services industry not just the bankers.

50. At 4:16pm on 18 Jan 2010, whitp wrote:
'What we need now is a new Mrs T someone with the courage and vision and energy to take on the current UK disaster and sort it out. And while they are at it, to sort out once and for all the ludicrously self serving remuneration package for the whole financial services industry not just the bankers'


What you need is a chap called writingsonthewall, assuming he hasn't stormed the Winter Palace over weekend.

If Cadbury had owned a bank, would things have been different?

To Angela @ 39: As Whitp says, Mrs T didn't wasn't responsible for our manufacturing decline. She cut out the dead wood, but she didn't kill it. If I were to blame a PM, it would be Attlee. He arrived at a crucial time when UK industry needed modernisation and there was the opportunity to spend US dollars doing it. He didn't. However, Germany, Japan, Italy and France did and you see the result. It's a strange irony that a government, apparently so dedicated to social reform, fell in to such 'sun will never set' errors.

48. At 4:04pm on 18 Jan 2010, Dempster wrote:

...and this part exactly?
Interest on loan = + £10

you will find this has been provided by the borrower - who borrowed the money and has produced 'something' which has been sold for a profit.

....but how can something be sold for a profit? Raw materials are paid for - and it's the same price everyone. The raw materials are refined into the commodity - and the workers are paid for their refining.

...so where did the £10 come from? - the only source was the failure to pay the workers their full wages for the labour they input. There can be no other source of profit as there are no other variables.

Alas, keep paying your workers less and less (in real terms) - remembering they are also your consumers - and what is the cumulative effect?

OVERPRODUCTION - just like we're seeing right now, a collapse in demand and too many goods and not enough buyers. Comapnies who have ramped up their production levels in expectation of further growth - all go to the wall.

A simple, but accurate explanation for the mess we're in now, were in in 1990, we were in 1974, we were in 1929 - I could go on right back to the south sea bubble in the 1700's.

#51

I believe writingsonthewall works for an investment bank

He may not be willing to give up his remuneration package

51 Dempster wrote :What you need is a chap called writingsonthewall, assuming he hasn't stormed the Winter Palace over weekend.

Well,I'd vote for him!

50. At 4:16pm on 18 Jan 2010, whitp wrote:
What we need now is a new Mrs T

She's the one who loved the financiers and despised industry, for crying out loud! She is responsible for the demands of independence of Scotland and Wales. A repeat performance of her will lead to one thing; the completion of the job she started. Independence will happen if the nightmare of that woman returns.

You must be either ill-informed or looking for the processes of Independence to be completed.

53. At 4:43pm on 18 Jan 2010, writingsonthewall wrote:
48. At 4:04pm on 18 Jan 2010, Dempster wrote:
...and this part exactly?
Interest on loan = + £10

'you will find this has been provided by the borrower - who borrowed the money and has produced 'something' which has been sold for a profit'


Assuming that you’re not expecting me to post the full unedited text of Murray N. Rothbard’s ‘The Mystery of Banking’, I respond as follows:

The interest is derived from further ‘loans’ in the future, the reason why we have inflation, caused by the ever expanding volume of ‘debt money’.

My recommendation to anyone who does not understand the basics of fractional reserve banking, first watch Paul Grignon’s serious 45 minute cartoon called ‘money as debt’, then read ‘The Mystery of Banking’ by Murray N. Rothbard.

50. At 4:16pm on 18 Jan 2010, whitp wrote:

"At least she had vision and the will and ability to drive her vision forward rather than the current bumbling incumbent"

....what like she had the drive and vision to force the Poll tax through - even though her ministers were very uneasy about it?
The result being the first capitulation of Government in front of the people for many years.

"What we need now is a new Mrs T someone with the courage and vision and energy to take on the current UK disaster and sort it out."

- oh perish the thought...

"And while they are at it, to sort out once and for all the ludicrously self serving remuneration package for the whole financial services industry not just the bankers."

...well it's not a new Mrs T you need then as she (and her party) are Economic Libertarians (which means they let business get on and do what it wants in the hope it will 'self regulate')
I'm afraid your doey eyed view of Maggie as the 'fixer' is completely opposite to her ideals and she would not be looking to restrict anyones pay.

As most Maggie fans people get confused about what she did - just like Blair she presided over the longest Economic boom in UK history - which seemed great at the time. A boom which she appeared to be in control of (just like Blair) but the reality in both cases is they just got on and off at the right time - they were never in control

...unfortunately it always collapses and then it's the next man's problem. In her case it was John Major, today it's Gordon Brown.

People also forget that JM was chancellor of the Exchequer before he became PM - much like Gordon today (although not for as long a period)

#50 whitp

Although its fair to say maufacturing in the uk has decline since 1960's the most catestrophic period was during Mrs Thatchers (and to some extent Mr Major's ) terms in office. manufacturing as a percentage of GPD droped from around 28% in 1979 to around 15% in 1998. Unemployment rose from 700k to 3 million people within 3 years of her taking office with 32 people chasing each job. the uk is now down to twelve position for manufacturing output per capita in Europe. 76.5% of the UK's economy is supported by sevices 76.5%, industry and manufacturing is around a total of 22%.

With regard to the scrappage scheme, the government contribution is £1,000 per car, vat alone on the vast majority of cars exceeds this.

#51 Mrs thatcher or writingsonthewall, no brainer for me!

54. At 4:45pm on 18 Jan 2010, mrsbloggs13c2 wrote:

"I believe writingsonthewall works for an investment bank

He may not be willing to give up his remuneration package"

This is true - which is why you need more people like me

I am campaigning every day here for ultimately my own demmise. If the financial services industry was closed tomorrow then I would be out of a job.
Unlike your average MP I don't live by the rule 'one for you, two for me' as I do not rate my ability above any other human being

To do so is the ultimate arrogance - which is why I would be happy to see wage equalisation.
Yes, that's right, I would get paid the same as the street cleaner, the retail staff, the car mechanic, the politican, the doctor, the nurse etc.

The differential is the enjoyment of the work - constructive and productive jobs are rewarding (and I don't mean money) - and as a result of wage equalisation all the non-productive jobs would die out (like banking)

...now find me a leader who is prepared to do that?

I can't hang around, once I've stormed the winter Palace tonight it's a big warm up for the 'big day' when we finally run one of our ex-prime ministers out of the country.

https://news.bbc.co.uk/1/hi/uk_politics/8464689.stm

I do wonder if Kraft/Hersheys really know what they are doing.

I won't buy any ex-Rowntrees chocolate bars (including Kit Kats) after they were taken over by Nestles, since the chocolate is now yucky (in my opinion). I suspect the backlash if Cadburys is taken over will be far stronger, so the value of the Cadburys brand will plummet as soon as they are taken over, and the purchaser will be left with something that isn't worth anything like what they paid for it. This will especially be the case if the chocolate changes at all.

They should just save their money, and invest it in trying to introduce their brands into the UK (which probably wouldn't work, since their chocolate is even more yucky than Nestles' yuk (in my opinion)). Any attempt to buy the Cadbury brand, then change it to make it profitable after their buyout costs, will doubtlessly backfire.

On the other hand, it might be good for the smaller chocolate companies!

Just read the first two chapters of Extraordinaty Popular Delusions and the Madness of Crowds by Charles Mackay that relate to the Mississippi Scheme and the South Sea Bubble first published in 1841.

Highly recommended and tend to support WOTW but may also suggest that for the for the french at least a state (royal) bank wasn't too good an idea.

59 Kudospeter, My recollection of Britain pre Thatcher is that we were in terminal manufacturing decline long before her arrival.

Message 39 Angela Colbridge

Nice post and I agree with your conclusion that we need to return to a manufacturing economic base.

However, I cannot agree with your rather rosey perspective of UK manufacturing in the Seventies. I was up to my neck in it and it was a dreadful shambles. It was almost embarrasing to be part of it. Management had failed utterly a decade or so earlier and was hiding behind a unionised workforce as an excuse for neither improving nor innovating. Much of the product was old fashioned, too costly and lacking in the quality that French, German , Italian and Japanese products possessed at the time. Jim Callaghan's government had done a lot by propping up formerly good businesses which had just been badly run but had no strategy or means to take the project forward other than to keep folk off the dole queue.

Ma Thatcher came in on a ticket of reform and sorting out the deteriorating public finances. The public finances nearly did for her in the early Eighties but despite her much vaunted cuts, her government made no reduction in the overall level of public spending.

I would agree wholeheartedly that time and money should have been spent on reforming those failed industries; bringing their product up to date, changing the management and introducing industrial democracy but what government was ever going to be that radical? Labour had already failed at that task. Thatcher had an alternative strategy in her mind's eye that would produce a quicker and richer reward, namely deregulation of the City, privatisation of utilities and something called a shareholder democracy. We have to accept that it was a pattern that worked pretty well for about twenty years. Short-term, I agree, misguided, I agree but it meant there was money once again for the majority and that was the single measure.

Then we get to 1997 when things could only get better. What happened? Well the City was deregulated further leaving nobody in charge. Jobs in manufacturing industry declined faster than they ever did under Thatcher. The public finances were allowed to let rip in the name of public services to the point that deficit financing returned for the first time since the Seventies. Then, of course, as we know the bubble burst.

I am getting past attributing blame to particular political parties as they were all happy to accept the scenario that was being played our prior to 2007. It was the same old curse from the Seventies: something could be had for nothing. In short our culture is broken and we have lost any real sense of value and quality. It has been broken for a long time; to my mind long before Ma Thatcher even knew where Finchley was.

So we are where we are and we need a strategy. Are any of our political parties articulating a strategy? None: but I think gradually the public will begin to demand it from them and it will come because it has to. The country is bust in all senses of the word. Both you and I know we can only work our way out of this hole through making things that other people will value and pay for.

What I want to see is an end to political dogma and a devotion to what works in the circumstances. We should dump hierarchies and elites as all that is just impractical, divisive drivel. We need to learn once again that nothing is for nothing and working is the route to wealth not borrowing. It will be a hard journey but it has to be for the long-term.

As when steel demand turned down ,Indian owned "Corus" first thought was to shut British plants, so a USA owned "Cadbury" will shut down Bournville if demand falls and keep their US plants open.

Demand will fall as both Kraft and Hershey cannot make decent chocolate (they use a cold process). The Americans cannot make a decent cheese either only processed rubbish.

Cadbury hasn't been a "UK company" for years and years. At least half of the shares are held by US institutions and at least half of the shareowners are in the US. Also at least half the top 20 management are American. Less than 30% of Cadbury's revenues come from the UK and less than 25% of its production is made in the UK. Cadbury employs about 35,000 globally, of whom fewer than 7,000 are in the UK. If you leave out the sales and distribution staff I would be surprised if more than 4,000 people in the UK are involved in manufacturing. Cadbury has made about 50 overseas acquisitions in the last 20 years and I didn't hear anyone complaining about the ownership of these businesses transferring to a British company. So Cadbury is already a global business, so what exactly are all the Little Englanders trying to protect here? No purchaser would dare mess with the taste of Cadbury's UK chocolate, so none of the punters worrying about being forced to eat Hershey bars need worry. Unfortunately it is a fact of life that there are workers in other EU countries who cost less than 1/7 of what it costs to employ an equivalent-skilled worker in the UK and even less if you look further east, so why would anybody want to invest in UK manufacturing? It used to be that the tax regime and employment legislation in the UK were favourable but a combination of the EU and this government have done away with all those advantages. In the meantime we all benefit from the lower prices which we pay for goods made far from our shores and I don't hear too many people making the case for higher inflation to keep factories in the UK.

As a shareholder in Lloyds, no longer a major one since Brown's Cocktail party takeover, I can tell you that UK jobs were not the priority even with UK shareholders, the largest of whom was the Government! I had no choice when they started outsourcing IT jobs and bringing in foreign staff on intra-company transfers, so Mandelson, Truth Economist extraordinaire, is only interested in his own neck.

re Mrs Thatcher and manufacturing.

How much of our Manufacturing Industry was down to British Leyland? I've no idea, but it was a dead man standing, maybe all Thatcher did was to stop holding him up.

Although the selling of Churchill-Matrix NCM manufacturers to Iraq was, in my opinion, madness.

I can't let this go sorry folks....

"Officials at the Newcastle-based bank insisted that the deal with the Championship club was in the "best interests of tax payers" after their counterparts at Newcastle announced the new deal. "

Can anyone explain why Northern Rock need to advertise? I mean it's not like there is anyone left in Britain who doesn't know what Nothern Rock is or what it does!!!

They also said:

"We feel that brand awareness and promotion are important elements in the continuing development of the company which is in the best interests of tax payers and we have looked at all advertising and promotional channels so they deliver a very high return on the investment and fit with our strategy. This deal does both."

...except football sponsorship is all about name branding an not product selling, I mean will Ameobi have "Stocks and shares linked ISA savings plan 5% guaranteed" emblazend across his shirt?

"The new contract will help keep the Northern Rock brand in the public eye and reinforce our strong roots in the North East region, a community we are immensely proud to support."

...I really don't think NR needs any help keeping in the 'public eye' and as for those Geordies - I'm sure they felt very 'supported' when they discovered their 'solid building society' had been turned into a casino bank putting their jobs and savings in jeapordy!

I couldn't make it up if I tried...

Full story here:

https://www.telegraph.co.uk/sport/football/leagues/championship/newcastleunited/7018012/Newcastle-United-sponsors-Northern-Rock-defend-signing-new-deal.html

#39 Angela Colbridge

I think for the state of manufacturing in the 70's we can defer to the opinion of those who were clearly there.

However, the decline by Atlee was followed by further decline by Thatcher and yet further decline under Nu Lab. - which clearly demonstrates no mater which 'colour of Government' we vote in the result is the same.

Decline, decline, decline...

Post 62, thank you I will check out those books. You probably have read the book or seen the tv series, but Niall Ferguson's Ascent of Money is a good read as well. Shows how mistakes will be made time & again & also how empires come and go, careful USA.

WOTW just a quick thanks again for your posts, I hope your employers never work out your true identity.

#66. Richard B:

Yes your about right regarding Cadbury except it is just a little worse than that. You could choose to support a small independent company like Green & Blacks, except Cadbury took them over. Or perhaps an old company like Fry's but Cadbury also took them over and relatively recently moved the production to Poland with the loss of 500 UK jobs.

No, very few tears here for Cadbury whichever way it eventually goes, I'll just stick to that smooth UK chocolate Galaxy!

# 39, 50 and 52

Manufacturing is doing OK actually and

Percentage of gdp is such a nonsense parameter

Gross value added by manufacturing is up 30% from 1980

In 1980 manufacturing was 26% of gdp which was 231 billion, so about 60 billion


Now its about 10% of 1400 billion or about 140 billion and actually there has been deflationary pressure on manufacturing prices in that time

The proportion of gdp has decreased because other things have increased like financial services and services generally.

Remember Rowntree ?

Can I ask a stupid question?

I can understand Kraft taking over Cadbury. But Hershey's has a lower net profit and revenue than Cadbury, and sells products under licence from Cadbury. I would have thought that Cadbury would be the one taking over Hershey's. Why is Hershey's looking at taking over Cadbury and not visa versa? And why is there a takeover and not a merger?

Might be a dumb question.......?

This does lead to the question : How exactly will we build an export oriented UK economy? as the ITEM club suggests we must do in the next 10 years. I can only suggest by a considerable drop in wages and a consequent drop in house prices.

Whatever Mr Peston says, the loss of another UK business inevitably means more jobs being lost, more people turning to central government support and fewer people paying the tax which has to pay for them. It's not the employees' fault, nor is the fault of the people running businesses used by those employees.

No other government in Europe would allow this sort of thing to happen to their own industries and their own workers. Maybe there is a message there, and it isn't "We are the only ones in step".

Last week GB was talking about concentrating on Labour's heartland, and this week the policies and attitudes he fostered as Chancellor sell more of Labour's "heartland" short.

Cadburys was never the best choc as a product, but it has been a consistently good marketer and operator as a manufacturer,and has made good returns for investors; if shareholders accept any offer from Kraft or Hershey they will be taking on debt and poor returns and will probably die before any improvement emerges; the UK choc market has always been resilient,never more so than in a recession;but the long view is : Kraft goes for bland American products with a poor return, not acceptable here;they are looking at a quick buck to bolster their own poor performance; furthermore,any takeover would certainly lead to job losses in the UK;Cadbury is doing exceedingly well now and there is no reason to doubt that it will continue to do so in a modern consumerist market; the current offers are still derisory when you view the potential. P.S.I am neither a shareholder nor a consumer of the product

As a manufacturer here's the problem: It's very hard work!

Service industries are essentially quite easy to setup ( low capital expense) and are quick to produce revenue. Manufacturing is expensive to setup and takes a long time to perfect a product. Because we British are lazy, we'd much rather set up a service company than a manufacturing company.

I think our small scale manufacturing industries are truely excellent. My own industry has over 400 UK based world leading companies. The problem is the biggest only employs about 200 staff. Our industry already export 90% of what we make, but we don't employ enough people.

So here it is: It's virtually impossible for us to invent new industries that employ 10s of thousands of people. We can invent however 10s of thousands of companies that employ 10 people. But to do this we need to foster a different mindset in the British, they need to be better educated and more realistic. They need to be able to afford their own homes and still have money left to spend from their wage.

It's quite do-able, but will only occur if the clear message is sent from the top, a national cross-party business plan for the UK.

And this is where the real problems start...

To stop all this nonsense, let's take a leaf out of Billy Bragg's book and take direct action.
https://www.guardian.co.uk/politics/2010/jan/18/royalbankofscotlandgroup-executive-pay-bonuses

I liked Crookwood's view; trouble is, as soon as one of your ten of ten thousand companies looks like outperforming,then one of the others who may have funding but poor product or service, may well bid for a better company to make up for its own inadequacies and go for a long term return;this is basic greed and dog eat dog and the only answer governments have is to ENFORCE existing taxation and tax dodging regulations;this, of course, is unlikely to happen as most MPs have vested interests and no longer represent their constituents,let alone the country.

53. At 4:43pm on 18 Jan 2010, writingsonthewall wrote:
...so where did the £10 come from? - the only source was the failure to pay the workers their full wages for the labour they input. There can be no other source of profit as there are no other variables.

Clever ! On the one hand demand that someone show you how banking profits are made with the proviso that all profit is exempt because it exploits the workers.

Isn't that a non-sequitur or something ?

Thanks everybody for covering this topic very well.

It strikes me that we should be running the country instead of the current muppets.

I am well known in my peer group as a political Nostradamus as I foresaw the folly of slackening government control on such issues. However let’s look at other meddling such as loss of political control of interest rates, removal of safeguards in the financial sector and the raiding of the pension system.

To the Government I say, "Don't you dare say the current situation we are in is not your fault". The least Labour can do is step out of the shadows of doom to save this firm and the UK jobs.

It is a sad day for British industry. I am sure I heard a politician saying recently that, as a nation, we should concentrate on the manufacturing sector not finance. Where was your support for BRITISH jobs Mr Mandelson? Shame.

I suppose that this dysfunctional government has never heard of the Competition Commission? No concerns whatsoever that one company will control the chocolate confecionery market in the UK - there again if there is no political advantage why do anything?

Great comments above, I read them with interest but don't post often.

Strikes me that this is an opportunity for a politician (of any persuasion) to come out and say that this sell-off of Britain must end. In my opinion this is what's required. The rest of the world is laughing at this country and nobody is bothered.
This may only be a chocolate company but if we don't stand up as a nation sooner or later then nobody with an ounce of common sense will encourage their kids to stay here.
After selling off all our infrastructure to foreign companies Britain is without pride. And nobody in authority gives a hoot. I'm afraid come the election I'm going to put a tick in all the boxes unless someone stands up and becomes a statesman/woman.

Message 80

Hear, hear! It must be done.

The UK has for many years been seen by foreign investors as a soft touch in terms of foreign raiders being able to buy virtually any British business. Despite the politician's rhetoric, the consumate ease for foreign concerns to purchase and disect UK business is not generally reciprocated overseas in most countries - in terms of major shareholdings in large companies. This has a lot to do with the big banks and to whome they will apply their own leverage to buy 'internationally'.

For this reason some purchases are now regarded as too big for the UK - so its not all a level playing field in terms of bank sleaze behind all of this.

Is there a case for the UK government putting e.g. a 49% foreign ownership restriction on the UK's largest and most sensitive businesses as being large and significant employers or as strategically important to the UK? I am convinced that there is.

We hear politicians like Mandelson whimpering in the background but lacking the ability, conscience, resolve, knowledge or commitment to UK plc to do anything about the likely sale of Cadbury's. When politicians argue that to bring in such measures to protect Uk businesses from vulturisation amounts to 'protectionism'- then look around - for those of us who have lived and worked overseas we know just how difficult it can be (amnd has been for the last 20 -30 years) for most British businesses to go into a foreign country and do anything - never mind try and buy a complete business in its home country. - this is virtually impossible for UK investors to achieve in some countries as the home countries 'ring fence' their own best businesses and or drag UK companies into a struggle to achieve any kind of effective competition.

I don't hear of any businesses or countries refusing to do business with e.g. China, USA or Venezuela because they offer first rate protectionism for their home based and grown businesses.

The other issue is that larger UK companies that were to become restricted on foreign ownerhip controls (a light touch in terms of regulation by no of shares/ employees/ £ 's invested value) could be rewarded with a lower rate of corporation tax and other incentives reflecting their value to the British economy.

It's not rocket science - its only our corrupt sleazing whimpering bung sucking spineless MP's that prevent this from happening and the UK getting on its feet - primarily in terms of manufacturing.

If Britain is to recover - we're going to have to shake things up and rattle some cages and be prepared to confront the international trade bureacracy that mires our country and to which our politicians regard as their scared bureacracy which they can all hide behind to allow them to continue their uselessness, cowardice and inertia.

Mandelson is a good example of this behaviour.

It's asymmetric. A US company can take over a UK in a deal that involves stock exchange but a UK company has to pay entirely cash for a US company. The UK government should redress the balance.

Also US business ethics is at a very low ebb, look at ENRON, Liar loans, World Com, Ponzi schemes - when AOL merged Time Warner - the worst deal in history- it was largely a stock exchange deal and the AOL share price was inflated by some dodgy accountancy. If I were a Cadbury share holder I would go over Kaft's accounts in forensic detail.

Bye-bye, Cadbury's.
If events follow the path of my husband's previous employers - sold off to over-leveraged private equity in a get rich quick scheme which went sour, selling off parts (and making redundancies) little by little just to pay the debt, and now leaving this country entirely - we won't have mass produced British chocolate any more.

It is a sad day for British Industry.

Kraft will look to reduce costs without doubt. Their shareholders will demand it after being forced to pay more than they wanted.

To every action there is an opposite and equal reaction.

Surely, under EU regulations only Bournville made in Bournville can be called Bournville?
Maybe everything made in the UK should be renamed...

I would urge ALLMYFAULT to read up on barriers to entry into established market sectors (I am not going to go into the issues/problems there are many good articles on the internet and other sources which cover this)which would require more than tax breaks and incentives. While I would agree that there will always a market for small niche suppliers but for new supplier to break into the mass produced large scale chocolate business providing employment for thousands of workers would be extremely difficult.

Ever since additives like PGPR were allowed into chocolate, I've lost my faith in British chocolate.