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Cadbury family would 'spin in their urns' over unpaid tax

Great grand-daughter of Barrow Cadbury expresses anger that company's owner Mondelēz International avoided corporation tax despite £96.5m profit

Ruth Cadbury has hit out over unpaid corporation tax by Mondelēz International

A descendant of the Cadbury family has insisted her ancestors would be "spinning in their urns" over the way owner Mondelēz International is running the business.

Ruth Cadbury, who is descended from Richard Cadbury, one of the two brothers who opened the Bournville factory, condemned Mondelēz for paying no corporation tax in the UK in 2014.

Mondelēz International is now Cadbury's parent firm after breaking out from Kraft Foods, the company which took over Cadbury in 2010 in a controversial £11.7 billion deal.

And it emerged in December the US-based multinational had paid no corporation tax in Britain in 2014 even though Cadbury UK made a profit of £96.5 million.

Ms Cadbury, now a Labour MP representing a London seat, is the great grand-daughter of Richard Cadbury's son Barrow Cadbury.

Richard Cadbury took over the firm along with his brother George from its founder, their father John Cadbury, and moved the focus from tea and coffee to chocolate.

Barrow Cadbury also helped to run the business after his father's death. Ms Cadbury is a former chair of the Barrow Cadbury Trust, a social charity active in Birmingham.

She said: "I was really fearful for the impact on Birmingham when the takeover went ahead.

"There was worry that a big international firm taking over an iconic British firm like Cadbury would be a loss to Britain and I think what we have seen with the tax arrangements has shown that is correct.

"Cadbury was paying taxes up to the takeover and now they have a scheme where they hide behind the international tax system and avoid paying UK taxes."

She added: "My forbears would be revolving in their urns if they knew what had happened because their company was based on and built on very strong social ethics.

"They were more than a profit-making chocolate factory. They built a community with a whole host of social and welfare and educational facilities.

"At the turn of the 20th century, there was no welfare state. They believed that part of building a profitable business was ensuring their workforce was happy and supported."

And she said: "Both as a Labour MP and as a Cadbury, I am very angry a company like Mondelēz can get away without paying any tax.

"When workers at Cadbury are paying 20 per cent of their salary in tax surely the big companies should be as well?"

It has emerged that Cadbury UK legally avoided paying corporation tax by offsetting interest payments on an unsecured £8.2 billion debt as losses.

Mondelēz insists it pays all the tax it owes.

This week, it also emerged sales of Cadbury Creme Eggs plunged after the manufacturer's new owners changed the recipe so traditional Cadbury milk chocolate was used instead of the popular Dairy Milk.

Some commentators claimed it was a cheaper ingredient.

It was revealed the company's Easter lines lost around £10 million in sales last year with the Creme Egg line worst hit, dipping by £6 million.

Sales of Cadbury Egg 'n' Spoon, launched in 2012, crashed by £1.2 million.

A spokeswoman for Cadbury said industry-recognised data from Nielsen showed a loss for 2015 of £7 million overall, not £10 million.

When Ms Cadbury's comments were put to the company, it said: "In common with all global businesses, we pay corporation tax based on the laws of the countries in which we operate.

"We comply with all applicable tax legislation in the UK and, on a global basis, we pay hundreds of millions of dollars in corporate income tax annually.

"Since 2010, we are proud to have invested over £200 million into both UK-based manufacturing and R&D supporting our 4,500 employees in the UK.

"Our £200 million investment includes £18 million into our Global Science Centre in Reading and our world-class R&D site in Bournville, where every new chocolate bar we sell in the world is invented by a team of talented chocolatiers.

"Our recent £75 million investment into four state-of-the-art new lines in Bournville will secure the next generation of manufacturing there - a site which makes over five million Cadbury Dairy Milk bars every day.

"Independent academic research found that, for every £1 spent by Mondelēz International in the UK, a further £1.42 is generated in the wider UK economy.

"This makes Mondelēz worth over £1.06 billion to the UK economy and in the 2013/14 financial year, our total contribution was £1.86 billion."

More than 200 Bournville employees agreed to take voluntary redundancies in 2015.

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