Labour backbenchers have warned the Government they will step up demands for action to prevent a foreign buyer axing jobs at Cadbury, if Ministers fail to intervene.
Gordon Brown and Business Secretary Peter Mandelson have issued a series of strong warnings to any potential buyer who tries to “asset strip” the Birmingham-based chocolate maker.
But they have also insisted there is nothing they can do to prevent a sale.
Jim Cunningham (Lab, Coventry South), Chair of the West Midlands Parliamentary Labour Party, warned that this was not enough, as he met a delegation from trade union Unite this week.
He said: “Depending on what the Government does, we will take the campaign forward.
“Lord Mandelson has met Unite, but we now want to speak to him ourselves. Our response will depend on what he has to say.”
A possible course of action would be to pressure ministers publicly by raising the issue repeatedly in the House of Commons, he said.
A delegation of seven Unite shop stewards representing workers from Cadbury plants in Dublin, Herefordshire and Somerset as well as Birmingham held a meeting with Lord Mandelson in his Whitehall offices yesterday.
As well as presenting Lord Mandelson with a box of Cadbury Fruit and Nut bars, they demanded reforms to takeover regulations making it harder for foreign buyers to acquire British firms.
In a statement released after the meeting, The Department for Business said Lord Mandelson had made it clear he was acutely aware of the strength of feelings generated by the takeover bid.
He said Cadbury was a major UK company and it was important that any buyer respect the company’s heritage and workforce.
However, the Business Secretary had stressed that he had no statutory power to intervene in this case.
More generally Lord Mandelson also told the union representatives he would continue to take a very close interest in whether shareholders played a full part in corporate governance, and whether they took a long term view of their responsibilities as shareholders.
It came as the war of words between Cadbury and US food giant Kraft continued.
Kraft has launched a £10 billion hostile takeover bid, and shareholders have until January 5 to decide how to response. But Cadbury, which employs 6,200 staff, has dismissed the offer as “derisory”.
Unite, which fears British jobs could be axed if Kraft is successful, points out that the takeover bid is funded partly by state-owned bank Royal Bank of Scotland (RBS).
RBS, which is 84 per cent owned by taxpayers, is one of nine banks lending Kraft up to £5.5 billion in total.
Jenni Formby, Unite’s National Secretary for the Food and Drink Sector, was one of the representatives who met Lord Mandelson.
She said: “We expect a state-owned bank to be more accountable to taxpayers. It should not be funding a bid that could have a serious impact on jobs in Ireland and the UK.”
She was “encouraged” by tough talk from the Government, she said. But she added: “We need to make sure that turns into meaningful action now.
“We have spoken to Kraft and they have said a lot of positive things, but when we ask for guarantees about jobs, they won’t give them.”
But the Business Secretary insisted he could not stop RBS funding the deal.
“He did say that the Government is not in a position to intervene as far as RBS is concerned, which we found disappointing.”
She added: “He said he would work on doing whatever he could to highlight his concerns that this takeover is not good for Cadbury in his view.
“We want to start a wider debate about what regulation is needed to ensure companies can’t just come along in this predatory way.
“We need to look at things like tackling the level of debt companies are allowed to have.”
Kraft’s bid was only possible because it had borrowed so much, she said.
“We also want to introduce the rights for employees so that they are consulted about takeovers and mergers.”
Unite is also calling for stricter controls to prevent control of a UK company going overseas.
In a briefing paper presented to Lord Mandelson and the region’s MPs, the union said: “If Cadbury is acquired by Kraft, the control of this iconic company will move from the UK to Northfield, Illinois, where Cadbury would become just a smallish UK subsidiary of a large US food conglomerate.
“All important decisions, and particularly on investment and jobs, would thereafter be taken in Illinois rather than by people who understand the Cadbury heritage and are dedicated to its future.”
Ms Formby said: “It is far too easy for predatory companies to come in and take businesses over.”
The union is contacting the Dairy Milk maker’s shareholders directly to say it is opposed to any takeover of Cadbury “whether by Kraft or by any other company”.
However, Todd Stitzer, Cadbury’s chief executive, has suggested that US confectioner The Hershey Company would be a preferable buyer, if the company is sold at all.
It is managed by charitable trust, established a century ago by company founder Milton Hershey to fund the education of orphans, and is seen as having a similar culture to Cadbury, founded by the Quaker Cadbury family who created Bournville village in a bid to provide their workforce with high living standards.
Cadbury is widely speculated to favour a tie-up with Hershey, with which it already has a business relationship as Hershey holds a licence to make Dairy Milk bars and Cadbury Creme Eggs in the US.
Earlier this week, there were reports that talks with Hershey had begun. But Mr Cunningham said there had been no approach from Hershey so far.
Ferrero Rocher maker Ferrero is also said to be considering options for Cadbury.
MPs published a fresh Commons motion backing Cadbury workers this week – and attacked Kraft’s record.
The motion said the Commons “notes with alarm Kraft’s record of closing 22 plants and cutting 60,000 jobs in the past decade in a desperate bid to cut costs.”
