‘Challenging conditions’ hit Irish sales at Cadbury owner

THE Irish arm of Mondelez – the international group whose brands include Cadbury and Kraft – has warned that the trading environment here continues to be challenging and that it was hit last year by commodity and foreign exchange headwinds.

Revenue at the Irish division fell to €180.1m last year from €190.1m in 2016, but its operating profit soared to €1.5m from €1.1m a year earlier.

It was helped by a reduction in its administrative expenses, from €17.9m in 2016 to €13.8m last year.

The accounts for Mondelez Ireland show that it had accumulated profits of €18.7m at the end of 2017.

“The market conditions continue to be challenging in all the categories we operate in – confectionery, cheese and grocery,” according to the directors in the latest set of accounts for the company.

“In addition, the business had to manage commodity and forex [foreign exchange] headwinds,” they added.

“The business looks to drive performance by launching new product innovation, building brand awareness through media campaigns, increasingly using new social media platforms.”

The said that they expect Mondelez Ireland to continue to expand its presence in the market.

It was reported yesterday that Mondelez’s European division has been stockpiling ingredients and finished goods in case of a hard Brexit.

Mondelez owns a large number of brands, such as Oreo, Halls, Toblerone and Ritz.

While a hard Brexit now looks increasingly unlikely, Mondelez confirmed that it’s preparing for the worst-case scenario.

“Like all businesses we’re monitoring the political decision-making process and preparing for a number of potential outcomes,” said a spokeswoman for the group

Mondelez would prefer a good Brexit deal that would allow free flow of products, Hubert Weber, the president of Mondelez Europe, said in the UK media.

“However, we are also preparing for a hard Brexit and ... we are stocking higher levels of ingredients and finished products,” Mr Weber told ‘The Times’.

The company has a contingency plan in place as UK is not self-sufficient in terms of food ingredients.

“We stand by Hubert Weber’s comments and have nothing further to add at this time,” said he Mondelez spokeswoman.

Food industry executives have been warning that the UK could be left short of food if a hard Brexit materialises.

“We at Greencore are not really concerned about tariffs at all, our issue is the logistics and administration of getting fresh food in and out of the UK,” Greencore CEO Simon Coveney said last week.

He added: “If you end up with 50-mile tailbacks in Calais and corresponding tailbacks in Dover, it won’t really matter whether there is a 15pc or 20pc surcharge on lettuce and fruit and vegetables coming from southern Europe. It will all rot in containers.”

Revenue at the Irish division fell to €180.1m last year from €190.1m in 2016