Cadbury

Don't buy from Bad Eggs this Easter...

Cadbury Bad Eggs

In December 2015, The Sunday TimesThe Guardian and Financial Times reported that Mondelez UK, the parent company of Quaker-founded, Birmingham based confectioners Cadbury, had paid absolutely nothing in UK corporation tax in 2014/15, in spite of make UK profits of £96.5m in that financial year. They did this by paying interest on debt bonds listed on the Channel Islands Stock Exchange. These interest payments can be offset as a loss against profits made elsewhere in the group, and therefore Mondelez UK were able to negate all their taxable profits - in spite of these debts having been created as part of Kraft's takeover of Cadbury in 2010 and having nothing to do with the costs of running their UK business. 

By avoiding UK corporation tax, Mondelez UK are not fulfilling their social duty to contribute towards the infrastructure and services that help them to run a profitable business in this country. These actions also greatly damage their reputation and bring shame on the name of Cadbury, a British institution and once known as a standard-bearer for corporate social responsibility.

In light of this, we urge our supporters to boycott Cadbury products for Lent, Easter and beyond, and to write to Mondelez UK executives explaining why they are taking this action.  The boycott should continue until Mondelez UK make a public statement of their intention to pay UK corporation tax in line with their UK profits. You can download a template letter here. You can also promote our campaign by following us on Twitter (@Methodist_TJN) and/or Facebook (/MethodistTaxJusticeNetwork) and linking to this page with the hashtag #BadEggs.

The Dark Side of Cadbury
This isn't the first time that we've tackled Cadbury. The Financial Times and The Guardian revealed in 2013 that they had been engaging in massive tax avoidance schemes for a decade, even before the infamous Kraft takeover. In the ten years before being taken over by Kraft, Cadburys made an average of £100m a year in profits, but only paid an average of £6.4 million per year in tax.

Since the takeover, new owners Mondelez International (formerly Kraft) washed their hands of any accusations of the previous administration’s wrongdoing, but it is quite widely known that Mondelez Europe GmbH, the specific arm of the corporation that controls Cadbury, are based in Switzerland for tax purposes.

Mondelez's corporate structure includes a number of holding companies using the Cadbury name based in the Netherlands, where 'participation exemption' laws and favourable bilateral 'double taxation treaties' with both developing countries and tax havens mean that profits can be moved through the Netherlands in order to reduce the tax bill. Furthermore, it was recently revealed that Cadbury under Mondelez have been avoiding tax in India through the setting up of a 'phantom factory' to qualify for tax exemption. This amounts to illegal tax evasion, and India are trying to reclaim the money in an ongoing court case. An MTJN leaflet, The Dark Side of Cadbury, was published as a result of these findings.

What can we do?
Here are just a few suggestions as to how you can campaign to make Cadbury come clean, as well as campaigning for tax justice in general:

  • Boycott Cadbury - until Mondelez publicly declare their intention to pay tax commensurate with their sales in all countries in which they operate, we will refuse to buy from a company who avoid making their appropriate contributions to wider society.
  • Write to the Mary Barnard, President of Mondelez International's operations in Northern Europe including Mondelez UK – Mondelez and Cadbury need to know that they can no longer get away with the sin of large-scale tax avoidance. You can download a template letter from us, or write your own, and send it to her at:

    Ms Mary Barnard
    Mondelez UK Limited
    Uxbridge Business Park
    Sanderson Road
    Uxbridge
    Middlesex
    UB8 1DH

  • Alternatively, email Mary at mary.barnard@mdlz.com, or email the Mondelez board at Mdlz-board@mdlz.com.
  • Write to your MP and MEP about why they should implement fully public Country-By-Country Reporting, produce Public Registers of Beneficial Ownership in British Overseas Territories such as the Channel Islands, and look into making intra-group interest payments non-tax deductible, to make it more difficult for corporations to use schemes like those used by Mondelez UK.
  • Download The Dark Side of Cadbury for more information.
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@Methodist_TJN tweeted this page. 2016-02-10 09:32:21 +0000
Learn more about the Cadbury Campaign on our website, and find out how you can take further action! http://methodisttaxjusticenetwork.nationbuilder.com/cadbury?recruiter_id=2
Methodist Tax Justice Network
The Methodist Tax Justice Network aims to put tax justice issues at the heart of the Methodist Church's mission, through campaigning, working with partners in the UK and overseas and educating and communicating within the Methodist Connexion.