Cadbury and the consumers
American giant Kraft, made an international profit last year of $10 billion. It has closed a raft of factories in rich countries and shifted them to poorer and more profitable Third World countries like Brazil. It launched a programme in 2014 aimed at ‘‘margin expansion and earnings growth,’’ as chief executive Irene Rosenfeld said in 2015.
A multinational hell-bent on increasing profits and returns to shareholders is not a good PR proposition. Certainly it is harder to sell to the public than a company which says it just can’t afford to carry on in Dunedin, however much it wanted to.
No doubt Mondelez would argue that profits mean jobs and that you can’t fight progress or the demands of efficiency in a globalised market. However, consumers will make up their own minds about this. Already some are saying that they will switch from Cadbury to Whittaker’s, the New Zealand-made product.
Of course Mondelez itself could provide some hard evidence to help the public decide if it was a rapacious profiteer or simply a company that couldn’t keep on in Dunedin, despite its best efforts. It could release the commercial information about exactly what profits or losses were being produced in its Dunedin factory.
If Dunedin was really a basket case, it could presumably prove it.
It presumably won’t do this, wanting to hide behind the wall of ‘‘commercial sensitivity.’’
That shouldn’t be the end of the argument, though. Cadbury could provide the information either to the unions or even to a nominated representative. If persuasive, it would then meet the growing suspicion among redundant workers and the public that Mondelez was just sacrificing the city to the God of Huge Profits.
Otherwise, the company does run the risk of a consumer boycott (now being championed by Kiwi film-star Sam Neill). There is, after all, a perfectly understandable nationalist argument to this. Cadbury is abandoning New Zealand; Whittaker’s has not. And consumers can decide whether one or the other is value for money.
Publicity matters to companies, because their image is money in the bank. When that image changes, the business is in trouble.
A storm in tiny New Zealand, a small market in a big world, might not matter much to the lords of Mondelez. But the company’s closure of factories in other wealthy countries has already caused a lot of fuss and might start to worry the company leaders.
The consumers, after all, are still king.