Sunday, November 22, 2009

Ethical Chocolate


The certification of Cadbury's Dairy Milk, in 2009, should be considered a highpoint in the fairtrade campaign.   It is estimated the impact of this will have been a doubling of the amount of fairtrade cocoa sold to the UK.

Therefore, it was quiet a shock to visit Cadbury's World last week and not find any reference, bar a few pictures stuck on the wall, that the bar had gone fairtrade.  This was, to be honest, rather odd.  Through a fantastic set of interactive videos, the story of the ethical, Quaker founded, Cadbury company seemed to end slightly too early.

Unfortunatly, it could all end slightly too early. Another set of people taking a peek around the factory were journalists.  With notebook and cameras, they were getting the low-down on what impact the proposed take-over bid from Kraft could have.

Therefore I thought it wise to return to an age old piramid cartoon. For, through the movements of craft, I am convinced one of the problems of capitlism - well the shareholder part - is clearly illustrated. Kraft discussed with the board what they thought of the plan. The board of Cadbury's said 'thanks but no thanks'.
Now, I would think at this point Kraft should take no as an answer. Afterall, that is what Children are taught - no means no.
Instead Kraft launched a hostile takeover bid. This operates, not in the companies interest, but in the interest of the shareholder. Ie the company aiming to do the hostile takeover opens up its wallet and waves money at the shareholder and says 'dare you overule the current management'.   Certainly, this grows even more worrying, because reports have begun to circulate that the Fairtrade status of the bar could be under threat should the deal go through.

So, to return to the pyramid. Popular around the time of the Russian revolution, it outlines the way the richest percentage of any population rely upon the poorest to prop up the system.  When shareholders are given dream amounts of money it is as though the top of the pyramid leans down to the bottom and begs them to move. However, as the Building Society debacles of the last decade illustrated, if you go away from a more co-operative approach to purely chasing profit the future isn't bright - it is the potential for absolute disaster.

Cadbury's are a fascinating orgainsation. Somehow they try to mix ethics with being one of the biggest confectionery companies in the world.  Many people didn't realise they striving for ethics - yet that is being highlighted as the biggest issue that challenges the merger talks.  Almost, it appears management have realised ethics behind the machine and wish to defend it.  Will the shareholders wish to defend it?

5 comments:

  1. Steve Lewis7:48 pm

    I'm a shareholder & I want Cadbury to stay independent, for the workforce, for the fairtrade deal (the opposition's best effort is Rainforest Alliance which is not, apparently quite as good as the fairtrade mark) & for the UK to keep a great British brand. Alas, I only hold a small amount of shares so my wishes won't matter.

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  2. Steve

    Great to hear from you. As a shareholder you are in a very exciting position.

    You have to stay positive don't forget that it takes those with small and large amounts of shares to vote against it to win.

    To quote Desmond Tutu:

    "Do your little bit of good where you are; its those little bits of good put together that overwhelm the world. "

    Warm Regards

    John

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  3. Anonymous9:51 pm

    Very thought provoking piece, John.

    I wrote to Cadburys in about 1993 asking them to make their chocolate fair trade, and had an answer back explaining why they wouldn't. I was a teenager and it was my first campaigning letter. I felt a real sense of personal satisfaction when they finally decided to become fair trade (although I'm sure no one there remembers my letter).

    Katherine

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  4. John – I agree with you in wanting Kraft not to take over Cadbury. But I don't understand at all how you are connecting the pyramid with the takeover bid... It's not movement up and down the pyramid: it's owner talking to owner, even if Cadbury is a more attractive company than Kraft is. You speak as if Cadbury were now a co-op (and make an analogy with a mutual building society). But it isn't: it's a plc, which happens to be a bit more cuddly and paternalistic than most. I don't know the details of the share register, but I expect a large proportion of the company is owned by pension funds in the usual way.

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  5. Thanks for an excellent post.

    And by the way it is great to see you back blogging so well!

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