Sales up but salaries held back at Cadbury

Posted on 29 Jul 2009 by The Manufacturer

Cadbury workers across the country are protesting today because they say the chocolate maker is refusing to honour the terms of a pre-agreed pay deal, despite increased sales and revenues.

The workers say they were promised a two per cent minimum pay rise in 2009 – the final year of a three-year pay deal. The deal stipulated that in the previous years the workers’ pay increase would be 0.5 per cent above inflation. With inflation sitting at zero in February of this year, Cadbury has offered its staff a 0.5 per cent rise and disregarded the two per cent minimum.

The workers have thus decided to take to the streets of Birmingham – Cadbury’s home city – in protest. There will also be further demonstrations outside the firm’s plants in Bournville, Chirk, Marlbrook and Somerdale and 1,300 workers are due to be balloted on potential industrial action.

The demonstrations have been timed to coincide with the release of Cadbury’s financial results which revealed that when one-off costs are not included, the firm’s profits were up by 24 per cent to £262m.

“The workforce feel betrayed by the company who are raking in record profits,” said Jennie Formby, national officer for the union Unite.

“The company has breached the agreement which was to pay workers in line with the cost of living for three years. These workers are, through their hard work, delivering record profits for this company.”

But a Cadbury spokesman responded by pointing out that despite the company’s strong current position, “no business is immune from the economic uncertainty ahead.”

He added: “We took the decision to freeze the pay of all clerical and management staff this year. The only exception was our factory staff and we feel that, given the very low rate of inflation, our pay increase agreed in 2007 is very fair.”

Cadbury said in its financial results that sales were up 12 per cent in the first six months of the year, as people look to stay at home more and buy cheaper treats in the face of the credit crunch. And the company said it has benefited further from falls in the prices of things like advertising since the economic downturn kicked in.

“We made good progress in the first half in challenging trading conditions,” said chief executive Todd Stitzer.